Putting Greece in its Place

July 17, 2015

There has been much talk about a potential “Grexit,” as some believe it is inevitable and may be the best solution in the long run. Nonetheless, Greece is receiving its third bailout in five years to prevent such a thing. The new bailout plan comes with some tough austerity measures in which Greece will have to make cuts to pensions and increase taxes in order to receive €86B ($96B) in new loans.

The fear of contagion has been cited as a reason for yet another Greek bailout. If Greece were to leave the Eurozone, a dangerous precedent may be set and other countries with high debt levels (such as Spain, Italy, and Portugal) may decide to follow. Even if these countries do stay, they may have difficulty finding investors to purchase their bonds. On the other hand, by continuing to bail out Greece, these countries may be less willing to make reforms and come to expect their own bailouts if their debt gets out of hand.

However, this week’s chart puts the Greece situation into perspective, particularly for U.S. investors. For all the attention Greece receives, it has a smaller economy than the state of Wisconsin and is less than half the size of Illinois. Even among the Eurozone, Greece contributes a mere 1.9% to the area’s GDP. Though there is the possibility of a domino effect, it seems unlikely that the events in Greece will have a large effect on the global economy.

The opinions expressed herein are those of Marquette Associates, Inc. (“Marquette”), and are subject to change without notice. This material is not financial advice or an offer to purchase or sell any product. Marquette reserves the right to modify its current investment strategies and techniques based on changing market dynamics or client needs.

Related Content

11.07.2024

Presidents, Real Estate, and Consistency

With the 2024 presidential election in the books, investors have now turned their focus to what the incoming Republican administration…

10.28.2024

Earnings Don’t Grow to the Sky

Loyal readers of Marquette research publications are likely aware that a small handful of U.S. large-cap technology-oriented stocks, dubbed the…

10.25.2024

A New Tariff in Town?

During his presidential term, Donald Trump increased tariffs on Chinese imports to address unfair trade practices including intellectual property theft….

10.24.2024

3Q 2024 Market Insights

This video is a recording of a live webinar held October 23 by Marquette’s research team analyzing the…

10.17.2024

Mexico Winning the Battle with Inflation

Like many countries in recent years, Mexico has grappled with higher-than-average inflation levels, primarily driven by elevated food and producer…

10.10.2024

The Elusive Small-Cap Revival

U.S. small-cap equities have trailed their larger peers for over 13 years. Although the asset class has shown intermittent signs…

More articles

Subscribe to Research Email Alerts

Research Email Alert Subscription

Research alerts keep you updated on our latest research publications. Simply enter your contact information, choose the research alerts you would like to receive and click Subscribe. Alerts will be sent as research is published.

We respect your privacy. We will never share or sell your information.

Thank You

We appreciate your interest in Marquette Associates.

If you have questions or need further information, please contact us directly and we will respond to your inquiry within 24 hours.

Contact Us >