Horasis, an independent think tank based in Zurich, Switzerland, is reckoned as a platform for information sharing between developing countries and emerging markets. Over the recent past, it has discussed strategies to overcome the global economic crisis and the role of emerging markets.
Horasis founder Dr Frank-Jürgen Richter discusses issues like the EU crisis and its impact on the Indian market with CNBC-TV18s Shereen Bhan.
Q: Lets talk about the EU crisis and what really lies ahead for emerging markets like India? We have just seen the results of the stress test, the EU Banks have beaten some would say expectations, but clearly worries remain, whats your view, how apprehensive are you about the current crisis thats gripped the European Zone?
A: No, I just arrived from Europe and I have to say Europe is in a very bad situation and we see very high unemployment rates in countries like Spain, Italy and Ireland. Currency Euro and European Banks are under pressure. I think the stress test for banks has been a very important method to bring confidence back to the system. Finally, what will happen really is transfer union, where the rich countries like Germany, the Netherlands and the North East countries really supports countries like Greece, Portugal, Spain and we have to keep European identity and we have to do our upmost, I believe to make Europe work again and to save the Euro.
Q: Has the apparent lack of consensus and the slow decision making in the EU compounded the problem by sending negative signals consistently now to the rest of the world and this has been going on for months now?
A: Lack of consensus is here, we can feel it, and we can see it. Whenever a leader from China from India, from the States goes to Europe they will ask who I should talk to. Should I talk to the head of the commission in Brussels? Should I talk to may be the national leaders in London, Frankfurt or Paris or may be should I talk to the President of the UK and the Central Bank in Frankfurt. So we dont really have one clear picture and we have been very slow in reacting and finding unified view on how to solve this Euro crisis.
Q: Over the long term do you think the European story will be impacted and what does this mean specifically for India. After all lot of Indian companies are investing in the European markets?
A: I believe the European story will continue and Europe will come back after a while. Europe will be strong again but it will be a different Europe. Many large European companies will shift production, manufacturing to Asia, may be eventually even moving their headquarters to countries like India and China which will be somehow like a stress test for Europe because we need employment, we need to feed our population. So, what we will see as a general trend is a shift from west to the east and I think India can only benefit from whats happening in Europe. Indian companies can acquire European assets; combine it with existing Indian companies, so I would say its a great opportunity for Indian companies.
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