Even as the European Union and Greece came closer to a deal early this week, research suggests that Greece isn’t the only country to face a debt crisis.

Consultants McKinsey & Co. found that seven years after the global financial crisis, no major economies and only five developing countries have reduced their ratio of debt to GDP. In a report, “Debt and (Not Much) Deleveraging,” the consultants found that global debt has grown a monstrous $57 trillion since 2007.

McKinsey found that developing economies account for roughly half of the growth in debt, and in many cases that’s beneficial. But in advanced economies government debt has soared and private-sector deleveraging has been limited.

Global Debt Binge: A Crisis in the Making

Source: McKinsey & Co.  Note: Figures reflect public and private debt 

At Global Income Edge our strategy helps insulate investors from debt crises and sudden reversals in growth. We’ve achieved this by focusing on a collection of companies that together are diversified across global markets and across products, and which have economies of scale, pricing power and a significant competitive advantage in their industries.

 And we’re keeping an eye on debt and adjusting out global investment strategy accordingly. Look to our next issue of Global Income Edge on July 13 for more details..  

 We’re not the only investment analysts to recognize the implications of what’s been happening in the Eurozone and elsewhere. Janus Capital Group’s Bill Gross, formerly PIMCO’s famed fund manager, said last week that Greece is the “canary-in-the-coalmine” for many developed economies. “Pensions, debt write-offs, fiscal policy austerity leading to low/no growth,” Gross wrote in a Twitter post.

 Clearly, higher taxes, which are widely expected in the coming years, would be a drag on growth. And various types of debt restructuring programs could chill various global fixed-income markets. Of course, the main problem is that at current growth levels, and with low inflation, there are few great options that can reduce debt quickly.

McKinsey calculates that the improvement in government budget balances required to start governments cutting debt is close to 2% of GDP or more in six countries: Spain, Japan, Portugal, France, Italy and the United Kingdom.

 And the consultants found GDP growth would have to be twice the projected rates or more to start reducing government debt-to-GDP ratios in six countries: Spain, Japan, Portugal, France, Italy and Finland.

 Meanwhile, in the U.S., former Fed Chairman Paul Volcker, in a recent report on state budgets, found that many states remain under heavy pressure.  

 State tax revenues, adjusted for inflation, “have barely recovered from their prerecession peaks,” Volcker wrote. Financial stress is tempting states to obscure their true financial position, and to “shift current costs onto future generations, and push off the need to make hard choices.”

 We think the global debt situation will eventually become untenable for many developed economies and eventually force potentially draconian, growth-stunting taxes, or severe debt restructurings that hurt fixed income investments.

 That’s why we continue to recommend global multinationals with investments in both developing and developed nations that are best positioned to bridge the growth gap and offer diversification among many countries.

 Portfolio

 One of the most enduring business trends in the coming years is the push for renewable and low-carbon emitting energy.  

 Only last week, the White House unveiled a program where the government would act as an investment clearinghouse for renewable-energy technologies. Pension funds, foundations and philanthropies have already committed $4 billion to this initiative.

 For its part, Congress a few months back passed an energy-efficiency bill that had strong bi-partisan support. Then, above it all, there was the Pope, who has weighed in on the issue, calling for a “revolution” to combat climate change.

 We continue to believe utilities are still the best way to play the expansion in renewables and distributed technologies, and we’ll continue to recommend companies that are advancing in these areas.

 That’s why we were extremely pleased to hear the news that Conservative Portfolio Holding National Grid (NYSE: NGG) recently won the top spot as a utility on Newsweek’s Top Green Companies in the World 2015. National Grid is a highly diversified utility company with diversified investments in the United Kingdom and the United States.

“We are committed to being an innovative leader in connecting people to the energy they use and to safeguarding our global environment for future generations. This ranking validates that we are on the right track,” Steve Holiday, CEO of National Grid, told Newsweek. 

 With a dividend yield of almost 5%, NGG is a Buy up to 74.

Strategic moves in the past year are starting to bear fruit for Novartis.

Novartis (NYSE: NVS) said it expects profit margin to increase this year due to cost cutting efforts and restructuring of its drug portfolio.

The company has made a slew of big moves in the past year. In January, it sold off its animal health business to Eli Lilly for $5.4 billion. Novartis followed this up two months later with the completion of its $20 billion asset-swap with fellow GIE portfolio holding GlaxoSmithKline (NYSE: GSK).  It also announced the divestment of its flu vaccines business to Australian biopharma CSL Limited, which is expected to close in the second half of 2015.

The transactions will all have a strong impact on the bottom line. Management noted that it wants to boost its dividend, stating:

While we continue to improve productivity and generate leverage, our capital allocation priorities remain the same: investing in the existing business, growing the annual dividend, bolt-on acquisitions, and share buybacks.

Novartis, which currently yields 2.7%, is a Buy up to $100.