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December 2011

EuroZone debt crisis and impact on India

By Raman Jokhakar, Mukesh Trivedi
Hon. Jt. Secretaries
Reading Time 1 mins
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What can Europe do to win global confidence in its ability to turn itself around? First, it must accept that its policies of subsidising a high-cost economy must end. For far too long have European governments used public money to benefit private constituencies, ranging from business to farmers to organised labour, and thrusting all manner of non-tariff barriers on the more competitive Asian economies. Second, Europe must either move closer to a political and fiscal union, to enable intra-European transfer of funds, or give up the illusion of a Union and let the nations seek their individual destinies. Both options come with a political price that Europeans must be willing to pay and be seen to be doing so, for the G20 to step in and help. Europeans who seek help from emerging markets do not see the irony: nations with per capita income of less than INR308,784 bailing out economies with per capita income of close to INR1,852,706.
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