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Where did it all go wrong for Greece?

Professor Keith Cuthbertson examines the causes of the current crisis in Greece and predicts a long road to recovery.

Thursday, 13 May, 2010

A culture of unsustainable borrowing, both individually and nationally, exacerbated by a lack of savings and the effects of the global recession led to Greece’s current economic hardship according to Professor Keith Cuthbertson in this week’s Cass Talks. Greece’s deficit isn’t actually much worse than most other EU countries the real problem is their debt ratio, their total stock of debt, which currently stands at 125% of GDP compared to 65-70% of GDP for the UK.
Professor Cuthbertson warns that the road to recovery is a long and difficult one. He argues that a cut and run’ approach, of dropping out of the Euro, would lead to the creation of a weak currency in Greece and almost certainly a run on the banks. However, the 750 million aid package from the IMF and EU will certainly help and will act as insurance capital that Greece can draw upon as a safety net for the tough times ahead.
The Cass Talks interviews are an opportunity to hear Cass faculty give their perspective on current business and finance news stories, global issues affecting the business world and new research coming out of the School.
Keith Cuthbertson is Professor of Finance at Cass. Listen, watch and download Professor Cuthbertson’s Cass Talks and see other Cass academics share their opinions at

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