While the IMF stalls on its rescue package for Greece, many in the market are beginning to question whether the country would not in fact be better off out of the euro altogether.
But for Steven Cordell, manager of Cazenove’s Pan Europe fund, that is a scenario that should be avoided at all costs.
‘Unless the Greeks are turkeys voting for Christmas then I don’t see an exit for them out of the Euro.’
‘The Greek state employs something like two thirds of the population so the number of losers would be massive.’
He says the reaction of the military is also a significant factor to consider when discussing any potential break away from the Euro for Greece.
‘Spending on the Greek army is amongst the highest per capita in the whole of the EU, so if a plan didn’t materialise you could see a military coup. We’re talking controlled order here and it has happened before in ‘74.’
Cordell says at the moment much of the diplomacy is currently focusing on huge austerity plans, this he thinks is missing a key point. ‘All the talk is about cut, cuts, cuts, “do as you’re told you naughty boy” type thing, but there has been no incentive for the Greeks to create a better future for themselves.’