We are clearly present in an era of great unwinding. In financial terms, we could call it the end of the Age of Leverage. In simpler, ordinary terms, it’s the great unwinding. The unwinding of the trust which underpinned the great political experiment of the Eurozone. The unwinding of the social contract between the baby boomers who put the West together after World War II, only to see their pensions and healthcare systems collapse. The unwinding of the idea that any family could aspire to buy a house in a real estate market with 5-7% per year appreciation and loans 20-30 times their annual salaries. The unwinding of 80% debt:GDP ratios, which were formerly considered ‘safe’.

Yesterday evening the Greek Parliament passed the third major austerity plan, after the initial Memorandum of May 2010 and the Mid-Term Fiscal Consolidation Plan of July 2011.

The Eurozone meeting in Brussels this past Monday, July 11th confirms that the Eurozone leaders are as far apart as ever on reaching a resolution to the Greek debt crisis. Absent real decisions in the next two weeks, it is likely that contagion will spread not only to Italy and...

The main problems faced by Greece remain a large and dominant public sector, and an adverse business environment for the private sector. Unless rapid structural changes are made to this business environment, it is difficult to envision how Greece will be able to compete in the future, let alone handle the challenges of managing its public debt.