“There is plenty of anecdotal evidence to support this. However, we could also point to plenty of similarly generous benefits and wasteful expenditure elsewhere in the developed world. For example, the Greek state pension is similar to the UK despite a greatly lower cost of living,” Jane explained.
“Arguably the real causes of the problems in Greece are longer term and more fundamental. Greece, like most of Europe, has an ageing population and a generous unfunded welfare system, particularly pensions,” he added.
“It is hard to fault the eurozone’s timing,” said IG senior markets analyst Chris Beauchamp. “Having steadily built the anticipation all weekend, leaders were finally able to announce a deal this morning.”
“Markets have reacted in a suitably ebullient tone, if only out of relief that a weekend summit has managed to produce something of substance. The hard work is not over – the deal still has to be got through national parliaments, with Athens and Berlin being the main ones to watch,” he noted. “
“It would not be surprising to see Alexis Tsipras depart the stage before the end of the week, given that he is likely to face more than a little opposition to a deal that is worse than the one Greeks rejected last week,” Beauchamp added. “A new national unity government would then result, and while this would provide a platform for reforms in line with creditor demands it does little for the image of European democracy. For now, investors are in a confident mood, but whether this optimism will survive the week as the details become clear and the nit-picking begins is another matter.”