But the institute (NIESR) calmed fears of a similar crisis arising in the UK, which has a public deficit of £163bn. Weale said: ?The UK situation is quite different for a number of reasons except in the fact that our magnitude of budget deficit is not very different from Greece..... It?s very unlikely the same thing would happen in Britain.?
He explained that the UK?s debt maturity was much longer, that the UK government had never defaulted and had, in fact, the ?longest record of honouring its debt in the entire world?. In addition, the UK government would always be able to honour its debt by borrowing through the banking system because sterling is legal tender.
Holland added that Greece was a ?special case? because it lacked investor credibility. She said the Greek government had ?consistently miscalculated important statistics related to the economy?, such as the size of its deficit.