[1]The crisis-ridden European Union prefers to generate in-house contingency plans than run to WB or IMF because their loan conditions will be worse than the crisis, says Prof J. Frey of the New York Institute of Technology.
Dr Frey was addressing the centre for trade, development and governance at the School of International Relations and Politics, Mahatma Gandhi University, here on Thursday.
EU’s smaller countries, besieged by overspending and reduced tax, faced huge budget deficits, further aggravating a severe balance payment crisis. This put EU’s very survival at risk.
However, Prof Frey said, EU countries realized that international financial institutions, when approached for loans, would strangulate economies of recipient countries, as terms of loans would be much severe than the crisis itself.
Advocating free trade areas, Prof Frey said one of the payoffs would be the lowering of commodity prices that will eventually benefit consumers.
However, governmental discipline with respect to tax collection and spending should be balanced and sustainable, he said.
Dr A. M. Thomas, Dr K.M. Seethi and Dr Mathew Kurian among others spoke.EOMJM
Links:
[1] http://archive.asianage.com/13freyjpgcropdisplayjpg-137