EUROPEAN DEBT CRISIS DEBT CRISIS: Debt crisis deals with countries and their ability to repay borrowed

funds. Therefore, it deals with national economies, international loans and national budgeting. The most basic definition that all agree on is that a debt crisis is when a national government cannot pay the debt it owes and seeks, as a result, some form of assistance. HOW IT STARTED: By 2009, many national economies started to buckle under the strain of the global financial crisis, and Greece was no exception. In additional to the global downturn, Greece also faced widening bond spreads. The news only got worse that October, when the newly elected Socialist Prime Minister George Papandreou released a new government budget for 2009, which revealed an existing deficit of 12.7 percent of GDP, three times the EU limit. (In April 2010, the EUs statistical office revised Greeces debt estimate once again to 13.6 percent.) In May 2010, Greece received a $152 billion bailout from the troika of the ECB, EU and the International Monetary Fund in exchange for rolling out deep cuts to public spending programs. That past June, the Greek government passed another round of public spending cuts in order to qualify for a second bailout package of $157 billion.

EFFECTS OF CRISIS IN EUROPE: Meanwhile, the Greek government began to reduce the salaries of civil servants, pensions of retirees and public spending. A growing number of Greeks don't have enough money for their everyday expenditures, and therefore shops and local producers suffer as well. The whole country is simply running out of the official money and its GDP has been decreasing for the last three years.

HOW THIS AFFECTS U.S: Put simply by Robert Reich, A Greek (or Irish or Spanish or Italian or Portuguese) default would have roughly the same effect on our financial system as the implosion of Lehman Brothers in 2008. That is, financial chaos. The collapse of Lehman Brothers in 2008 and its harrowing aftermath revealed just how interconnected the worlds financial system had become. Many believe that a European state default, and its ripple effects, would produce another Lehman moment, possibly on the order of several magnitudes. What this means on a practical level is that the financial system would freeze up: banks would be less willing to lend to each other, and as a consequence, would be less willing to extend lines of credit to businesses and individual households. WHAT WILL HAPPEN NEXT? When in a community there is a dearth of monetary means (to facilitate production, exchange and consumption), however, we can simply create some new ones ex-nihilo. It becomes a "local money". States (or Europe in this case) disapprove strongly of this because money is one the pillars of State power, although one could say that it is none of their business to interfere with the way a local community organizes its internal exchanges (see for instance household money). The emergence of local money happened in many places, and the phenomenon is accelerating at the beginning of the XXIst century, mostly as a consequence of the computer revolution. We foresee that it will happen in Greece. The Greek government will begin to pay its civil servants and state pensioners in part with something that may be called a "temporary system of vouchers", and for convenience it may write on them whatever name they like, for instance "drachma" or "eurodrachma" (introduced with an exchange rate 1Dr = 1 with the euro). These will be usable to buy goods and services in Greece, and it will be forbidden to refuse them. And if the government doesn't do this, it is even conceivable that some private outfit do it.

SOLUTION: When banks run out of euro banknotes in their assets, they still have accounts of loans and of reserves at the central bank in debit in their assets, and accounts of deposits from citizens in credit in their liabilities. These accounts can henceforth function as a system of signs (like the slate of a grocer's); there is no need that they be partially "guaranteed" by real euros on the asset side of secondary banks. People can write checks, and banks belonging to the same clearinghouse can make the appropriate entries in their books : if individual "a" draws a check on its bank A, and gives it to individual "b" (as payment for something received from "b"), then "b" will take this check to his bank B, which in turn will send it to C, the common clearinghouse of A and B. Finally the clearinghouse C will ensure that, on the liability sides of both banks, the account of "b" at B is credited the check amount, while the account of "a" at A is debited the same figure. And the opposite entries are made on the asset sides of both banks, in some other accounts, "reserves at the central bank", "private debtors", or any other appropriate account, but not "banknotes". This is a local money, formally denominated in euros, but these are no longer real euros, because they are not accepted abroad. They function only within the country. In the case of Greece, they can be called eurodrachmas.

BASIC TERMINOLOGY : RETAILING: Retailing is the interface between the producer and the individual consumer buying for personal consumption. This excludes direct interface between the manufacturer and institutional buyers such as the government and other bulk customers. A retailer is one who stocks the producers goods and is involved in the act of selling it to the individual consumer, at a margin of profit. FDI : Foreign direct investment (FDI) is defined as a company from one country making a physical investment into building a factory in another country. The direct investment in buildings, machinery and equipment is in contrast with making a portfolio investment, which is considered an indirect investment.

EMERGENCE OF FDI IN INDIA: In the early nineties, Indian economy faced severe Balance of payment crisis. Exports began to experience serious difficulties. There was a marked increase in petroleum prices because of the gulf war. The crippling external debts were debilitating the economy. India was left with that much amount of foreign exchange reserves which can finance its three weeks of imports. The overall Balance of Payment reached at Rs.( -) 4471 crores. Inflation reached at its highest level of 13%.As a result, Indias credit rating fell in the international market for both short- term and longterm borrowing. In this critical face of Indian economy the then finance Minister of India Dr. Manmohan Singh with the help of World Bank and IMF introduced the macro economic stabilization and structural adjustment programm. As a result of these reforms India open its door to FDI inflows and adopted a more liberal foreign policy in order to restore the confidence of foreign investors. GOVERNMENT MOVE ON FDI IN RETAIL: The government has decided to open up the retail sector to global investors through FDI in multi-brand retail with a ceiling of 51%, and 100% FDI in single-brand retail. It means that global retailers such as Walmart, Carrefour, Tesco and others can set up mega deep-discount stores in the country through joint ventures with Indian firms, where the foreign partner can hold up 51% equity. Single brand retail companies such as Swedish furnishing giant Ikea or sporting goods and equipment major Reebok can set up stores of their own in India through their own subsidiaries. Till now they were required to set up stores through joint ventures in India that allowed the foreign partner to own up to 51% equity. PROS: 1) Consolidation of Retail front-end (customer facing) activities into various retail formats, thus allowing efficiencies to be gained through economies of scale. 2) Introduction of various food and fresh vegetable storage techniques, especially at front end 3) Generation of mass-scale employment for various specialized retail skills, including sales, marketing, inventory management, etc... 4) Possible access to lower cost produce through appropriate import-deregulation for most products that are retailed. 5) will cut intermediaries between farmers and the retailers, thereby helping them get more money for their produce 6) will induce better competition in the market, thus benefiting both producers and consumers 7) Big retail chains will invest in supply chains which will reduce wastage, estimated at 40 percent in the case of fruits and vegetables CONS: 1) Wastage and rotting at the farming end is a big issue today in Indian retail scenario. This will probably not improve since the back-end investment and development/ utilization of supply chain (cold storages, warehousing) is still dependant on business/ political issues that have nothing to do with introduction of only front end retailers like Wal-mart, Tesco, etc.... 2) will disintegrate established supply chains by encouraging monopolies of global retailers 3) Small and medium enterprises will become victims of predatory pricing policies of multinational retailers. 4) Farmers may be given remunerative prices initially, but eventually they will be at the mercy of big retailers. 5) It may bring down prices initially, but fuel inflation once multinational companies get a stronghold in the retail market. 6) It will lead to closure of tens of thousands of mom-and-pop shops across the country and endanger livelihood of 40 million people.

SUGGESTION: 1) The retail sector in India is severely constrained by limited availability of bank finance. The Government and RBI need to evolve suitable lending policies that will enable retailers in the organised and unorganised sectors to expand and improve efficiencies. 2) A National Commission must be established to study the problems of the retail sector and to evolve policies that will enable it to cope with FDI as and when it comes. 3) Entry of foreign players must be gradual and with social safeguards so that the effects of the labour dislocation can be analysed & policy finetuned. Initially allow them to set up supermarkets only in metros. 4) The government must actively encourage setting up of co-operative stores to procure and stock their consumer goods and commodities from small producers. This will address the dual problem of limited promotion and marketing ability, as well as market penetration for the retailer. 5) Government should ensure the equitable distribution of FDI inflows among states. The central government must give more freedom to states, so that they can attract FDI inflows at their own level.

Indeed, India needs a business environment which is conducive to the needs of business. As foreign investors doesnt look for fiscal concessions or special incentives but they are more of a mind in having access to a consolidated document that specified official procedures, rules and regulations, clearance, and opportunities in India. In fact, this can be achieved only if India implements its second generation reforms in totality and in right direction. Then no doubt the third generation economic reforms make India not only favourable FDI destination in the world but also set an example to the rest of the world by achieving what is predicted by Goldman Sachs23,24 (in 2003, 2007) that from 2007 to 2020, Indias

GDP per capita in US$ terms will quadruple and the Indian economy will overtake France and Italy by 2020, Germany, UK and Russia by 2025, Japan by 2035 and US by 2043.

How Safe Is Nuclear Power??

We all can only feel deep sympathy and compassion for the victims of the terrible catastrophe that befell Japan on 11 March 2011. One of the world's largest earthquakes ever of magnitude 9, a 10-meter tsunami that flattened many coastal areas, freezing weather for the survivors sleeping in the open, shortages of food and water, and a series of explosions and fires at the six nuclear power plants in Fukushima, with the danger of a meltdown that would release huge amounts of radioactivity. Some advocates of nuclear power have long argued that a major accident is about as likely as being hit by a meteorite. In 1975, the nuclear industry asked Professor Norman Rasmussen to produce a report that would reassure the public about the safety of nuclear energy. The report concluded that the probability of a complete core meltdown is about 1 in 20,000 per reactor per year. Reality has shown this to be a gross underestimation. The three best known serious nuclear power accidents are those of Three Mile Island in 1979, Chernobyl 1986, and now Fukushima. But there have been many more accidents and partial core meltdowns releasing radioactivity. A study commissioned by Greenpeace concluded that the Chernobyl accident may have resulted in an estimated 200,000 additional deaths in Belarus, Russia and Ukraine alone between 1990 and 2004. The nuclear power plants in Fukushima have about thirty times as much radioactive material as the reactor that exploded in Chernobyl, and Japan is much more densely populated. Even if there were no accidents, no solution has yet been found in over 50 years for the safe storage of the radioactive waste produced by nuclear power plants. One of the by-products, plutonium 239, has a half-life of 24,100 years. That means, after 24,100 years, the intensity of radiation has declined

by only 50%. It will take 241,000 years until the radiation has declined by a factor of 1000, which is considered a safe level. How can we guarantee that our descendants will not be exposed to those wastes for 10,000 generations? The "precautionary principle" urges us to avoid the worst possible outcome of any decision. This implies that we should dismantle all nuclear power plants. Are there any alternatives to nuclear energy? Indeed there are safe ways to produce renewable energy with wind, solar power, wave and ocean-thermal energy, which do not contribute to the greenhouse effect, unlike the burning of fossil fuels. The Desertec project aims to generate electricity in deserts using solar power plants, wind parks and to transmit this electricity to consumption centers. The first region for application of this concept is in the Middle East and North Africa (MENA) and Europe. Solar power systems and wind parks spread over 17,000 km2 (0.2% of the Sahara desert) would provide a considerable part of the electricity demand of the MENA countries and provide continental Europe with 15% of its electricity needs. Why do we have nuclear power despite all of its dangers for current and future generations? There is a simple reason. Nuclear power plants are highly profitable for a few, at the expense of other people's safety. Electricity from a nuclear power station can be cut off if people do not pay their bills, but energy from the sun collected on house roofs cannot be cut off. It makes people independent. The nuclear lobby does not want that. Democracy requires that decision are made by those affected, and that voters be fully and truthfully informed. People have been lied to about the safety of nuclear energy, and have in most cases not been allowed to participate in decisions about nuclear energy. That must change. It is remarkable that all insurance companies have so far refused to insure against nuclear accidents, because they argue that they do not want to risk their money based on some professor's calculations claiming the risk is low. What if he is wrong? Insurance companies insist to base their risk calculations on real

experience. Because insurance companies refuse to cover the risks of nuclear accidents, the Price-Anderson Act of 1957 commits the US federal government to cover such risks. Other countries have similar legislation. This represents an enormous subsidy by the taxpayers to the nuclear industry. If the nuclear power industry were forced by law to pay for insurance against accidents, and pay for the safe disposal of its waste, we would have no nuclear power plants. It is true that solar energy is currently more expensive than electricity from nuclear plants. But this is partly because of the indirect subsidy for nuclear power, and the shortage of research into alternative sources of energy. If a fraction of the research funds spent for nuclear power had been devoted to safe sources like wind and solar, we would most likely have cheap alternatives today. If insurance companies, the experts in estimating risks, are unwilling to risk their money, why should people be forced to risk their lives?