Feldstein: Greece Will Default and Portugal May Be Next

Friday, 30 Apr 2010 03:11 PM

Share:
  Comment  |
   Contact Us  |
  Print  
|  A   A  
  Copy Shortlink
Harvard economist Martin Feldstein — who 20 years ago warned that the euro would prove an “economic liability” — says Greece will default on its bonds and other euro zone nations may follow.

“Greece is going to default despite all the talk, despite the liquidity package,” Feldstein says, adding that Feldstein said other members of the 16-nation euro area may also default, with Portugal the main candidate.

Standard & Poor’s this week downgraded Portugal and Spain as well as Greece.

“Other countries may be able to do better dealing with their fiscal problems,” Feldstein notes. “Portugal is going to have a very hard time doing that.”

Feldstein points out that Greece will have to cut its budget deficit from 13.6 percent of gross domestic product last year, forcing its economy deeper into recession and sapping tax revenues.

“Those are enormous cuts, impossible to live with,” he told Bloomberg.

Feldstein believes the euro is now undervalued as investors focus on the Greek crisis.

He also fears that the U.S.’s debt could “easily” pass 100 percent of GDP and has urged President Barack Obama to cut non-defense discretionary spending and restrain tax cuts.

As Greece barreled closer to the edge of a debt default this week, fears that the crisis would infect other countries rattled the world's financial markets, Fortune reports.

"It's not a question of the danger of contagion," says Angel Gurria, the head of the Organization for Economic Cooperation.

"Contagion has already happened. This is like Ebola."

© 2014 Moneynews. All rights reserved.

Share:
  Comment  |
   Contact Us  |
  Print  
  Copy Shortlink
Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Retype Email:
Country
Zip Code:
 
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
You May Also Like

Study: Fist Bumps Could Cut Transmission of Germs

Monday, 28 Jul 2014 14:39 PM

Ditching handshakes in favor of more informal fist bumps could help cut down on the spread of bacteria and illnesses, ac . . .

Marshals, Police Wounded in New York Shooting, Suspect Dead

Monday, 28 Jul 2014 14:31 PM

Two U.S. Marshals and a New York City police officer were shot and wounded on Monday while trying to arrest a suspect in . . .

Attorney: FBI Documents Will Show Second Oklahoma City Bomber

Monday, 28 Jul 2014 14:25 PM

A Utah attorney believes federal authorities mistakenly suspected his brother of helping Timothy McVeigh carry out the 1 . . .

Most Commented

Newsmax, Moneynews, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, NewsmaxWorld, NewsmaxHealth, are trademarks of Newsmax Media, Inc.

 
NEWSMAX.COM
America's News Page
©  Newsmax Media, Inc.
All Rights Reserved