Gordon helped us to avoid Greek debt but heavy cuts lie ahead

THERE is an Aesop's fable about a grasshopper dancing through the summer, fiddling away happily while around him an army of ants work studiously, if humourlessly, to prepare for the inevitability of winter.

When winter comes, the grasshopper has to be rescued by the ants but only after being made to face the error of his ways.

Greeks have been grasshoppers over the past few years. Sovereign and personal debt has exploded and paying tax is regarded as optional, jobs are for life and pensions are secure. Not now.

To all intents and purposes, the day-to-day authority for the management of Greece's budgets and financial strategy has been passed to European bankers and finance ministers.

This may not be a bad thing, as it is clear that the Greek government lacks the political imperative to implement the measures to address its problems.

To the credit of Gordon Brown, he resolutely resisted the blandishments of Tango Tony to join the euro, which means that sterling can be allowed to take the strain, although the pound's weakness on world markets increases inflationary pressures.

Now the UK has to address his legacy of a Himalayan economic challenge. We can only expect higher taxation and an expenditure strategy, which is bound to take the government onto a collision course with the unions.

The election also created an interesting political situation in Scotland. Alex Salmond has still to wait for the munificence of the political parental being in Westminster before he can apply a budgetary allocation. Just how long will this parent remain so munificent?

The Labour Party in Scotland now has 41 seats, the SNP six, with the Liberal Democrats 11 and the Conservatives just one. Cameron could take this election result as a rejection of the whole concept of unionism on which his party is based in Scotland and offer, instead, the prospect of genuine independence.

It is hard to envision such a prospect being appealing to potential employers, while the tax burden would inevitably fall on the tiny band which actually make such a net contribution to the national exchequer.

However this is unlikely to be of much relevance for the foreseeable future. The new Chancellor will have to address, quickly, the problems at the core of our economy. As a result, and perhaps again as a consequence of the problems in Europe, the immediate future may not be the political challenge that many believe. The public sector has to be curtailed and the private sector has to energise, while individuals will have to pay more tax.

The bond market has performed particularly well over the past year, rallying strongly from the debacle that followed the Lehman Brothers implosion. That party may now be nearly over. Inflation is a growing challenge and, in fact, may actually be welcomed as one way of reducing the deficit.

Investment markets reacted enthusiastically to the financial package in Europe, although I thought it inconceivable that Germany or France would allow the euro structure to collapse. This euphoria may give way to more reflective analysis.

Still, the global economic outlook is probably better than some acknowledged. We probably have about a six to 12 months of political hiatus but, over that time frame, the fragile bonds holding the political edifice together will start to fray and we will once again be heading down the road to a general election.

On the basis of recent experiences, it may be no more conclusive than its immediate predecessor.

• Bryan Johnston is a senior divisional director with Brewin Dolphin.