However, I have come across a real gem on Alphaville today which I thought I must share with you. A report by Morgan Stanley entitled "Ask not whether sovereigns will default but how".
Remember how the IMF proved to us the other day that we are not Hungary (but would really, really like to be)? I'm sure I got some cheers from the Troktiko-readers back home by pointing out that Ireland and the UK and in worse shape, from an intertemporal budgets perspective, than we are.
Oh, dear. Well it turns out they are not.
You see, unlike the UK and Ireland, Greece is an old, old country. By 2050 over one third of our population will be over 65.
And we're very bad at being old because we believe people over 55 shouldn't work. The British and the Irish may be insolvent but they just might be able to dig themselves out through changes in policy if they can just buy some time. We on the other hand, cannot because we have very little discretion.Our population is ageing and they will need their hospitals, their pensions, their bus concessions and whatever have you.
Unsurprisingly, the Morgan Stanley report finds that we carry a bigger demographic burden than almost any Western country. The IMF can't fix this. The Government can't fix this. They can only work on the two first bands of the graph above, which incidentally only represent about a quarter of our problems.
Good luck Yorgo.
Readers can browse the full MS report below:
MS Default
