Newton's Stewart warns on eurozone 'debt dominoes'

Newton income manager Iain Stewart has warned the problems in Greece are just the tip of the iceberg of a ‘monetary distortion' across the developed world and could trigger 'debt dominoes' throughout Europe.

The manager of the £4bn Real Return fund said both peripheral and core Western countries have built up their debt on these distortions and cheap money, which have led to a mispricing of risk for both borrowers and lenders. "Under more ‘normal' circumstances, the debt of a relatively small economy like Greece could be restructured and written down, allowing us all to move on. "The reason why we do not seem to be able to do this is the clear risk of contagion to other ‘debt dominoes' in the eurozone and beyond," he said. "Clearly, the Greek sovereign bond market, much like the US sub...