GREECE-BASU 2LST

Basu said the country is now sufficiently interconnected
with the world that a serious global crisis will wash ashore
into our country and we will have to be prepared for that.
The chief economic advisor, however, said, "if the
astronomical figure of over USD 140 billion bailout package
helps contain the crisis and stop it at Greece, I think we
will be fine. In fact, we may get some additional capital
inflows in search of a safer haven."
Basu pointed out that debt contagion is always a risk
in financial markets and very often it can fly from one
country to another through the psychological behaviour of
investors and peculators. They begin to play the game
differently, he said.
"Lot of the reasons, I think, the IMF and European Union
have stepped in so aggressively into Greece is they want to
stop the contagion. But financial markets contagion is always
a bit of a risk. We have to live with that," he said.
"So, a lot will depend on the size of the crisis that
comes out of the Greek sovereign (debt) problem," he added.
There are already fears that many other European
countries like Portugal and Spain may also face similar
sovereign debt problems. PTI