Greek recession could be longest in modern history, says Aberdeen

Greece “may well be in the midst of one of the longest recessions in modern history”, says Aberdeen’s Mike Turner.

The head of global strategy and asset allocation for Aberdeen says that the debt restructuring which occurred on 9 March is “arguably just another fudge providing time” and that the risks of a departure from the eurozone continues to rise.

Turner says: “What is woefully lacking in all this is a credible plan for rejuvenation and growth in Greece (and Europe).

“More specifically there need to be improvements in relative competitiveness to ensure that the chronic current account imbalances which sit at the heart of the crisis continue to decline.”

He adds: “Without action to stimulate growth, austerity alone will worsen the problem and lead to massive social dislocation. There is only so much that the Greek people can and should shoulder.”

The latest yield on 10-year Greek government bonds is 19.28% – well below the previous yield of 39% but still significantly higher than Portugal’s 13.96%; the second highest in the eurozone.

Greece aimis aiming to bring its debt-to-GDP ratio down from 160% to 120% by 2020.