Britain looks like Greece just before the debt crisis
Over the last 15 years there have been plenty of different potential candidates. Turkey, perhaps, with its out-of-control inflation. Or France, with its huge budget deficits and rioters who block any reforms. Or even the United States, with an erratic president at war with the central bank.
You could make a plausible case for worrying about any of them. And yet, over the last week it has become painfully clear that the next Greece is Britain – and the warning signs are already in place.
A decade and a half has now passed since Greece sparked the first great euro debt crisis. It is enough time for most of us to have largely forgotten the details, but at the time it posed a systemic risk to the global economy.
Its debts had spiralled out of control, the Government had run out of money and banks across the eurozone, and especially in France and Germany, were on the brink of collapse if all the Greek bonds they owned turned out to be worthless.
It quickly spread to Ireland, Portugal and Italy and threatened to bring those countries down as well. In the end, the European Union stepped in with a bailout, the European Central Bank provided a backstop and the crisis eventually blew over.
Greece started to make painful cuts to public spending and stoically endured a deep recession. But it was a very close-run thing.
On Friday, we learnt that UK GDP fell by 0.1pc last month, even though most economists had forecast a modest rise. We should not put too much faith in the monthly output statistics.
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