Greece could still leave the euro if the country’s government cannot encourage foreign investment, Newton’s Paul Brain has said.
Mr Brain, head of fixed income at Newton, said last year’s restructuring of Greek debt – which involved holders of Greek government bonds agreeing to accept a writedown – could keep the country in the eurozone for a period, but it would not work indefinitely.
“The rationale for investing in Greece is just not there,” Mr Brain said. “If it cannot [encourage investment] how can the government justify staying in the euro? Greece will leave the euro if things don’t change – restructuring debt only means it can string it along for longer.”
Alexander Kozhemiakin, head of emerging market debt at Standish Investment Management, questioned whether there was enough “political will” to accept Greece into a tighter fiscal union, which he said was a key part of the future of the single currency.
