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This is an archive article published on June 11, 2012
Euro zone break-up could hit us in face
Chief Economic Adviser Kaushik Basu has warned that if the euro zone breaks up,it will hit India in the face as the country is unlikely to have the strength to overcome that crisis
Written by Press Trust Of India
Mumbai | June 11, 2012 12:52 AM IST
2 min read
2 min read
Chief Economic Adviser Kaushik Basu has warned that if the euro zone breaks up,it will hit India in the face as the country is unlikely to have the strength to overcome that crisis.
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, he said at a function over the weekend.
On the impact of a possible Greek exit from the Euro on the domestic economy,Basu said,We are not out of the woods. There is indeed some risk that this is going to last a while. It will affect us.
Basu said a deeper European crisis would be a jolt and it could spin Europe into a big crisis.
It is going to be a difficult one or two years for the world for sure.
On the positive side he said,Thankfully,Europe is no longer our biggest export destination,to the Middle-East we probably export more today.
But he said the impact on India will be indirect. Europe being a major driver of growth and if it slows down,even if we dont get a direct hit,the US is going to get hit immediately,China is going to get hit immediately. So,the impact on us will come to us through our trading partners.
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