Greek anecdotes

Greece is screwed. They have taken the piss from the moment they entered the Euro, running structural deficits virtually every year since 2002. Their pleas for help from within Europe will be met with an entirely justifiable "nein". Contrast this with a country like Spain which is in trouble as well but ran structural surpluses between 2002 and 2007, as well as having a much larger potential impact on the European economy. Their case for a bailout will be vastly stronger when the time comes.

Greece has to re-finance €50-60bn of debt every year for the next 5 years, this in an economy only slightly larger than Scotland and Wales. The interesting thing is how not if Greece defaults.

A sovereign default is a different kettle of fish to a corporate default. Greece is unlikely to fail to pay a coupon, however much the holders of Greek cds would like that to happen. The default is likely to take the form of a dawning realisation from bondholders and the Greek government that a restructure is the best course for both of them. A cheap money IMF loan might put this back a couple of years, but without a massive scale boost to productivity from within Greece, the interest costs will eventually overwhelm the economy.

Anecdotally they have other issues on top of this. My flat in London was recently purchased by a Greek cash buyer, and the agent told me this is increasingly common. This surely suggests that Greek banks are going to face rising liquidity issues as Greeks try to get their assets out of the country and avoid the tax clampdown promised by their government.

I also saw a story that their tax collectors had gone on strike. That nicely sum up the scale of their problem.