How far is Britain from Greece? That's the question lurking behind British headlines in recent days. And the answer isn't 1,400 miles. We're talking finance here, not geography.
Watching the scenes in Athens, people understandably want to know whether there's any chance of the same happening here.
You'll be relieved to hear the answer: however bad things might be here, we really are a long way from being Greece.
Here's what we have in common with Greece: our budget deficit is more than 12% of GDP; our national savings rate is too low; and we've both recently won the chance to host the Olympics.
You may laugh, but for Greece, the cost of hosting the Olympics played a non-negligible part in putting it where it is today. Hopefully it won't play a big role in our financial future.
The low rate of national savings tells you that Britain - like Greece, and Portugal, and Spain, and Ireland - has a current-account deficit. We're a net borrower from the rest of the world, which means, at the margin, we're dependent on the rest of the world to fund a good portion of our government debt.
But if I tell you the magnitudes involved, I promise you'll feel better. Last year, Greece ran a current account deficit of more than 11% of GDP - the highest in the entire OECD. Portugal's was not much better: nearly 10%. Spain's was 5.3% of GDP. Compared to that lot, the UK's roughly 2.5% of GDP current-account gap looks rather small beer.
Hope Steph is right - the question is not only how painful will it be to get back into the black but will we have learned the lessons?
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