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:
Country
Zip Code:
Privacy: We never share your email.
 
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
Top Stories
You May Also Like

Duncan's Nurses: We Held His Hand When Nobody Else Would

Friday, 24 Oct 2014 23:08 PM

The last people to hold Ebola patient Thomas Eric Duncan's hands to comfort him as he was dying at Dallas' Texas Presbyt . . .

Living Large: The Scandal of Bishops' Residences

Friday, 24 Oct 2014 20:31 PM

Camden, N.J., is one of the poorest cities in the U.S. So it was a shock earlier this year when reports surfaced that Bi . . .

Judge Rules Oklahoma Abortion Law Can Take Effect

Friday, 24 Oct 2014 20:09 PM

A new Oklahoma law that requires clinics to have a physician with admitting privileges at a nearby hospital present when . . .

Most Commented

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

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