What can Greece learn from Brazil?

In recent weeks there has been considerable discussion about the pressures on peripheral European economies. Fast-rising public-sector debts have led to speculation developed economies could suffer crises akin to those many of the global emerging markets (GEM) faced between 1997-2002. In many respects, balance sheet weaknesses in parts of peripheral Europe mirror the plight of GEM countries in the late 1990s. Indeed, on some metrics, the debt dynamics of Greece today look worse than Brazil did back in 2002. Brazil’s debt to GDP ratio then was about 65%, with a fiscal deficit some 3.5% of...