The following piece from Platinum Asset Management titled “The Greek Conundrum” succinctly summarises the gargantuan challenges facing the Greek Government and its people and the likely impact of a Greek default on global asset markets.
A Greek default would not surprise Europe or investors.
The starting point is that the Greek government has too much debt and it has neither the ability, nor the willingness to repay it after almost seven years of economic contraction. At the end of 2014, the Greek government owed €317 billion and during the year it took in €81 billion of tax and other revenues and had €78 billion of expenses before interest costs. The remaining €3 billion primary surplus wasn’t enough to cover its €7.6 billion interest bill, let alone start paying back debt. Read the full piece here