We’re not Greece but we’ve yet to turn corner

The Greek deal has been hailed by European leaders as a crucial development in the survival of Greece in the euro and the euro itself.

That does appear to be somewhat of an exaggeration. The fact is, the Greek economy is imploding as evidenced by a 7% decline in size in the final quarter of last year and an unemployment rate close to 21% of the labour force.

Greece will get some debt forgiveness out of the deal, with private holders of Greek debt set to take a nominal haircut of over 53% and when converted to net present value terms, the loss will exceed 70%.