Jeremy Beckwith: We have the tools to avoid a collapse like the one in Greece

They announce revised and much higher estimates for the budget deficit, and the markets wobble and ultimately lose confidence to such an extent that it becomes impossible to finance the public debt.

The IMF and the EU are called in to bail out the government and impose painful austerity measures. This is the Greek story of recent months and one can see many parallels with the situation in Britain.

It has now become standard political tactics that a new government will seek to enact all its unpopular but necessary measures in its first few months.

In addition, a new government will seek to discount its inheritance by telling the people just how awful the mess was left by the previous government.

In Greece's case it is clear that the previous government had actively concealed the true state of government finances in 2009. The scale of this deception led markets to the conclusion that Greece was bust.

Although there is no reason to believe that the current UK budget deficit is being underestimated, the estimates for future years are based on historically very optimistic estimates for the growth of the UK economy, an average of 3.5 per cent per annum compared with the recent long-term average of 2.5 per cent, which itself was driven by both consumers and government spending more than their income.

A new UK government is very likely to change these assumptions soon after it comes into office.

For example, the Conservatives plan to create a new body, the Office for Budget Responsibility, to do just this. Much higher deficit estimates for later years will emerge, throwing up the prospect that, unless action is taken relatively quickly, then in the lifetime of the next parliament, Britain's public finances will be in a similar position to those of Greece today.

That, hopefully, is where the parallels with Greece come to an end. Britain has several advantages over Greece.

First, Britain is a country which has historically been able to deal with similar situations without civil unrest or danger of default. All major political figures, with the possible exception of Gordon Brown, accept the need for action soon on the budget deficit.

The General Election has delayed the publication of any detailed plans on this score, but by late summer a credible plan will be brought forward.

If not, then expect the financial markets to demand one by generating a run on sterling and gilts. Indeed, there is a general acceptance from the British public that this is necessary, in a way that is not yet true of the Greek public.

Second, the refinancing of UK public debt is much easier to manage, since its average maturity is about 13 years.

This means that in a typical year about 6 per cent of GDP has to be refinanced along with the deficit for that year, whereas in Greece the average debt maturity is only six years, so that about 19 per cent of GDP has to be refinanced in a typical year in addition to the annual deficit.

Finally, the UK is still able to fall back on the traditional alternative default mechanism, which is devaluation.

Greece is locked into the euro, at least until it decides it can no longer bear the necessary austerity, and so is unable to make its industry competitive by printing money to buy the government's bonds and letting its currency fall.

For the UK this is very much an option. In many ways it is what occurred in late 2008 when the pound fell by 25 per cent against both the euro and the dollar in a very short space of time.

It proved to be essential in mitigating the impact of what would otherwise have been a disastrous time for the UK economy.

Jeremy Beckwith is chief investment officer for wealth managers Kleinwort Benson.