Is India Ready for the Collapse of Eurozone?

Bangalore: ‘History repeats itself’ is a famous phrase that everyone is aware of and sometimes history creates a great impact which affects the nations for many years. We are talking about the Euro zone crisis if nothing is planned to avoid this crisis then it may impact our lives. Greece went on for elections second times in two months to decide whether they might stick to the Euro zone arrangement which is creating a hazardous situation for them.

Greece named its exit plan as the “Grexit” and similarly even India has come up with a contingency plan. As the Euro zone crisis has already hampered the Indian exports to Europe and Prime Minister Manmohan Singh blames the European crisis for the slowdown in India’s economy. Though the economists don’t agree to this, they believe that government has to be blamed for it. Soon the finance chiefs from the seven leading industrial powers will hold a talk on this Euro zone crisis and discuss on the growing alarm over the threat posed by the damage within the 17 nation union.

Kaushik Basu the Chief Economic Adviser said that the break out of Euro zone would adversely affect India as well because at present it doesn’t have the strength to overcome the crisis with a larger magnitude. He said, “If Europe does slip into a crisis, it is going to be a very difficult time. There is no escaping from that, though we (government and the Reserve Bank) have a team that is working on different scenarios, to see how we will react, it will be a lie to say that we have the strength to weather that. It will hit us in the face.”