Greece Debt Crisis!!

A few random thoughts come to mind when thinking of the unfolding Greek financial tragedy, like:

1. A 1st world country irrespective of size ought to have an industrialized base to prosper. With an industrial base similar to the Greeks, it is a very likely base for a meltdown sooner than later.

2. Tourism and other sectors are good but are still seasonal and very fickle. Getting better rates, tourists won’t think twice before defecting somewhere else….and along goes your money!

3. In the event of a crises, harsh measures though not of the kinds imposed on the Greek people by IMF & EU & ECB, need to be taken seriously. Tax cuts and cuts in subsidies etc have to be undertaken with speed and severity. If not, in times to come, coffers become as empty as the that of the Greek banks! Some like cuts in essential services etc do sound absurd and disturbing though.

For India, Greece is at a distance both physically and financially. Implications therefore are only slight and mainly on account of:

1. Indian industries may be tempted to set-up shop there and get whatever tax breaks it gets. Being part of EU (and hoping it remains so!), it shall get access to the lucrative European markets sooner or later along with Turkey and Central Europe.

2. Indian Economy should crank its rate of returns or otherwise industry besides setting up Greenfield start-ups there may fold operations here and shift there. This though is doubtful immediately as industry depends not only on economic conditions but also availability of manpower and existing infrastructure. As re manpower, the numbers available in Greece or for that matter anywhere in Europe would be certainly expensive besides asking for better more and better perks and privileges. India, all said and done has an excellent internal market if exports become difficult to sustain.

3. Greece going down would mean pressure on Euros i.e. its value goes down compared to other currencies including USD which augurs well for exports though imports would become expensive and India imports in large quantities. EU might feel the heat from other similar economies like Ireland, Portugal, Spain and Malta which put together can be a sizable sum of money down the drain. If these too collapse, a long drawn our depression of the kinds seen in the 1930s in the US would become a world scenario.

What can we possibly say? What’s your thoughts?

Wait, watch……and hope for the best!