15 january 2015, greece is the word, again

Many are the doom mongers scenario-planning various outcomes of the imminent greek election, spreading that worst of ailments, uncertainty and panic, around the markets at the possibility of a grexit from the euro. We have been here before (14 may 2012, the unthinkable exit; 16 june 2012, the greek election) and got through, but past performance, as every investor will tell you, is no guarantee of the future. The general relaxed attitude, given that the new greek government seems likely to push for debt forgiveness, seems borderline complacent. My ex-boss lbs provides a very cogent analysis in the ft about why greek debt isn't, or shouldn't really be, a worry, but little market or especially political behaviour has much to do with grounded reality. Its national debt of 175% gdp, he points out, is hardly unprecedented and anyway sovereigns never pay back their debt, they just refinance it and actually greece doesn't need to issue any new debt for quite a while, largely because they've stocked up through the bailout on 30-year maturity. The debt, he concludes, is more sustainable than many other eurozone countries. As was the case at the other end of the crisis (see 7 feb 2010, bring in the imf), greece's central problem remains its economy's competitiveness. The euro is neither the problem's creator nor its solution: that lies, still, in greek hands.