Unserviceable debt – who carries the can?

“If you owe the bank $100 that's your problem.  If you owe the bank $100 million, that's the bank's problem” the famous quotation from JP Getty neatly sums up the dilemma faced by the international community in dealing with the Eurozone debt problem.

Last year the “Greek problems” took centre stage whereas over the past week or so Cyprus has been the focus. Eurozone finance ministers have now agreed a 10bn-euro bailout deal for Cyprus to prevent its banking system collapsing and keep the country in the Eurozone.

In the interim the problems in Southern European States such as Italy and Spain have still to be resolved.

The fact is the international community will have to learn to accommodate the spectre of countries failing to grapple effectively with their debt burdens. In turn this will inhibit growth and limit the speed and strength of global economic recovery.

It continues to be an uncertain time but one undisputable outcome of the above will be the hard ball attitude of the Banks towards companies seeking funding.

Now more than ever it will be necessary to demonstrate effective control over all areas of cost and exposure as the banks will undoubtedly remain reluctant lenders.