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Greece is to Europe, what India is to Asia: save it from ruin

Ashok V Desai | Updated on: 1 July 2015, 15:15 IST
QUICK PILL

In trouble

  • Greece is buried under debt and starved of fresh loans.
  • It may default, even exit the European Union.
  • Else, it can agree to back-breaking austerity.

To the rescue

  • India should lend to Greece, but not to repay debts.
  • The money should go to support the poor, students.
  • India will gain global influence it sorely lacks, unlike China.

I am not usually sentimental, but I don't mind admitting a slight infection at the moment. It is, after all, regarding Greece.

Greece is to Europe what India is to Asia: the continent's first civilisation that gave it some of its most precious ideals, democracy and philosophy. And its cultural heritage is in as poor a shape as India's: whether it is Acropolis or Delphi, Parthenon or Olympia, little stands of Greece's great accomplishments.

Still, for someone who has had his fill of Europe's cathedrals and palaces - which look more or less like the monuments the British left us - the white and cream colonnades in the wonderful sunshine of Greece look so magical.

Its language is more challenging. While I picked up the rudiments of most European tongues in a few weeks, Greek was one language that defeated me. True, most European languages have a Greek heritage, but they owe more to Latin. And for someone who picked up the Roman alphabet as part of our British heritage, the Greek alphabet poses a challenge. After a week or two, I could barely manage street names; reading newspaper headlines was a pain, and conversation was beyond me.

Case for help

But there are unsentimental, hardheaded reasons why our government should rescue Greece. We need to spread ourselves outside India. Ours is the third or fourth largest economy in the world. But compared to the other great powers - the United States, the European Union and China - our overseas presence or influence is negligible.

It would be better to exercise such influence closer to home. But in East Asia, we do not stand a chance in competition with China, and the Middle East is in such a shambles it's not worth getting involved.

India should help Greece. In return, Greece can waive taxes on establishments with over 50% Indian clientele

True, there are relatively stable countries of interest such as Iran, Saudi Arabia and the United Arab Emirates, but they don't need us. Our government has for years tried to get closer to African countries, mainly by throwing modest foreign aid and inexpert Indians at them, but there too we cannot compete with the EU or China in aid or expertise.

In Greece, we have an opportunity that suits our purse.

Rich Indians have such a hackneyed view of a good time. For decades they used to fly to London. Then, when the oil boom took thousands of Malayalis to Dubai, its malls became the Indians' Mecca. And once the information technology boom took thousands of young Indians to the US, New York and San Francisco became the magnets.

It is time Indians were exposed to more interesting places like Greece and Europeans were exposed to Indian cuisine, which is bound to follow Indian tourists.

A good deal

Greece crisis embed

A pedestrian passes graffiti titled 'Death of Euros', painted by French street artist Goin, on a wall in Athens. Photo: Kostas Tsironis/Bloomberg/Getty Images

The government should ask Air India to start subsidised flights to Athens from major Indian airports, and recruit a few thousand English-speaking Greeks - there are plenty, thanks to the educated Briton's addiction to Greece - to make Indians feel at home in Greece.

And it should lend money to Greece, not to repay its mountain of debt but just to support its poor, students and pensioners. The Greek government should offset that money by removing all taxes on hotels and restaurants that have more than 50% Indian clientele.

The question is bound to arise: how can the Indian government get involved in Greece without wading into its debt problem? It cannot. The IMF and the European Central Bank will get their claws into any Indian aid, directly or indirectly. And since India is friends with both, it can't rebuff them entirely. It should give them, and the Greek government, intelligent advice.

First, it is clear that Greece can never repay its debt. It has, in fact, been clear for some years. Those who lent it money were idiots, or had unrealistic objectives such as keeping the country in the EU, and must suffer for their folly. So, there has to be a debt write-off, and the bigger it is, the better. India should encourage the creditors to be generous to Greece.

Greece can never repay its debt. Those who lent it money were idiots and must suffer for their folly

Second, Greece is bound to leave, or be thrown out of, the EU. But it cannot easily give up the Euro and bring back the Drachma. It should, therefore, be encouraged to reach a limited understanding with the EU, and start using the Rupee.

Finally, Greece is in such trouble because its public finances have been grossly mishandled. It has spent far more than its revenue, and its politicians and bureaucrats have outdone our worst in corruption and extravagance. This is where we can give them advice - on how to rebuild their treasury so as to remove corruption and concentrate expenditure on the essentials.

We are lucky, and are doing surprisingly well in today's rough-and-tumble economic order. Let us pass on a bit of our good luck to Greece.

The views expressed here are personal and do not necessarily reflect those of the organisation.

First published: 1 July 2015, 15:15 IST
 
Ashok V Desai @CatchNews

A senior economist and commentator on economic policy and a pioneer of economic liberalisation in India, Desai was also Chief Economic Adviser to the government. Known for his iconoclastic, bold and original views on the economy, he has taught, conducted research, and coordinated large research projects both in India and abroad.

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