India and Kazakhstan on Wednesday inked five key agreements including a defence pact to enhance military cooperation and a contract for supply of uranium. Prime Minister Narendra Modi and Kazakh President Nursultan Nazarbayev held comprehensive talks in which they decided to actively engage in the fight against terrorism and extremism. Modi, who held restricted as well as delegation-level talks with Nazarbayev, noted that they also agreed to work closely to expand bilateral trade by addressing structural impediments between India and hydrocarbon-rich Kazakhstan. "We have shared perspectives on many international issues, including regional peace, connectivity and integration; reforms in the United Nations; and, combating terrorism," the Prime Minister said at a joint press event in Astana with Nazarbayev. Defence CooperationNoting that the defence and security cooperation was an important dimension of strategic partnership between the two countries, Modi said, "We both want to make it stronger, including in defence manufacturing. We welcome the new Memorandum of Understanding on defence cooperation." The MoU would further widen the scope of bilateral defence cooperation including regular exchange of visits, consultations, training of military personnel, military- technical cooperation, joint exercises, special forces exchanges and cooperation in UN peacekeeping operations. Welcoming the signing of a contract between NC "KazAtomProm" JSC and NPCIL for a renewed long term supply of natural uranium to India to meet its energy requirements, Modi said, "Kazaksthan was one of the first countries with which we launched civil nuclear cooperation through a uranium purchase contract. "We are pleased to have a much larger second contract now. We intend to expand cooperation in other minerals, as well". A joint statement 'Tej kadam' was also released after talks which said the leaders noted the rising challenge posed by terrorism in many parts of the world and in their immediate region and underlined the importance of a stable and secure environment for peaceful economic development. "They agreed to continue their active engagement in the fight against terrorism and extremism including exchange of information," it said. In this context, they highlighted the importance of regular inter-agency consultations and meetings of the Joint Working Group on Counter-Terrorism. The leaders also called for early conclusion of the UN Comprehensive Convention on International Terrorism. Observing that Kazakhstan was India's biggest economic partner in the region, Modi said, "But, our relations are modest, compared to our potential. We will work together to take economic ties to a new level." The other pacts included Treaty on Transfer of Sentenced Persons, human resources, cultural exchanges and capacity building. 'Critical Role'Modi said in his vision for India's relations with Central Asia, Kazakhstan will play a "critical role". "We greatly value our relationship with Kazakhstan. We have enormous synergies of markets, resources and skills for a strong bilateral relationship. We discovered remarkable convergence in our economic policies, approaches and strategies in a number of areas," he said. Modi, who was earlier accorded a red carpet welcome at the Akorda presidential palace, once again congratulated Nazarbayev on his 75th birthday and lauded his vision for Kazakhstan's progress. Religions BooksThe Prime Minister also gifted him a set of books relating to religions born in India which included an English translation of Guru Granth Sahib, as also specially commissioned reproductions from the manuscripts collection of National Museum, Delhi to Kazakh President. One of Jainism's most revered texts, Bhadrabahu's Kalpasutra (15th century AD) in Prakrit; one of Buddhism's most important scriptures Ashtasahasrika Prajnaparamita (12th century AD) in Sanskrit; and a Persian translation of Valmiki's Ramayana (18th century AD) in nastaliq script were also part of the reproductions. Congratulating the people of Kazakhstan on Astana Day, the 550th Anniversary of the Kazakh Khanate and the 20th Anniversary of the Constitution of the Republic of Kazakhstan, Modi underlined the growing political and economic role of Kazakhstan, which contributes to stability and development in the region. Modi thanked Nazarbayev for supporting the UN resolution on the International Day of Yoga and its first successful organisation on 21 June 2015 in Kazakhstan. "President Nazarbayev compliments Prime Minister Modi on success of International Day of Yoga. Calls it spiritual heritage of India," the External Affairs Ministry Spokesperson tweeted. Expressing concern at the slow progress on the UN Security Council reform, the leaders called for concrete outcomes to be achieved in the 70th anniversary year of the UN and reaffirmed their commitment to Intergovernmental Negotiations (IGN) to comprehensively reform the Security Council including expansion in both categories of membership. Later, the President hosted a lunch for Modi. "Across the Hindu Kush and the Pamirs, the bond of Bollywood. Awara Hoon performed at the luncheon in honour of the Prime Minister," the Spokesperson tweeted. (PTI)
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Only if the agricultural sector is in a healthy state, will the economy grow at a more rapid pace, says Manish Kumar PathakPrime Minister Narendra Modi has often said that he dreams of kick-starting a second green revolution. In a critical step towards this path, the Cabinet Committee on Economic Affairs has pushed through two crucial policy decisions last week as it approved the Pradhan Mantri Krishi Sinchai Yojana ( PMKSY) and the National Market for Agricultural Produce. These two measures will go a long way in minimising the uncertainties and the various risks the agricultural sector particularly in the rural areas face. These instruments will also ensure that the farmers receive a steady income; and this will only transpire if the agricultural productivity improves.The agricultural produce has generally been low over the past few years. For instance, the productivity of rice is much lower than in Brazil and China, inspite of the fact that the area of land that we have under agriculture is much greater than these countries. The main impeding factor that still plagues our produce is the uncertain rainfall, and our over-dependence on it. Also, the irrigation facilities provided are very obsolete. As per the SECC (Socio-economic and Caste Census), only 37 per cent of the land in rural areas has been provided with assured irrigation for at least two crops every year. This is an abysmally low figure.This is the scenario that the PMKSY is ideally rolled out to change. The main focus of this mission will be to converge the investments that are aimed at crop irrigation. Also, there is a strategy that will be aimed primarily at improving the water cycle. Under this, the irrigation which is carried out will be discussed extensively with the concerned Zila Parishad and accordingly funds will be released to the state governments. ‘More crop per drop’ is the water saving mantra that will ensure more area under irrigation.PMSKY & Second Green RevolutionPMKSY will aim at a decentralised implementation with state level planning and execution. The state and district administrations would be preparing the State Action Plan (SAP) and District Action Plan (DAP) respectively. These plans would be medium to long term documents that focus specifically on three areas – water sources, distribution network and water use application. The Prime Minister had earlier suggested that MNREGA should be merged with PMSKY for more extensive execution at the micro-level irrigation projects. The success of PMSKY will go a long way in reducing the dependence of the farmers on ground water. Also, the integrated programme will help reduce the dependence of the agricultural sector on the erratic monsoons.The government had declared in the Union Budget that they want the farmers to extract best possible price for their products. The announcement of an electronic portal that integrates 585 APMC (Agriculture Produce Market Committee ) all across the country is an implementation of the budget proposal. A package of Rs 200 crore has been announced for setting up this portal, which will enable farmers a greater market, and create an opportunity to avail best price for their products. This step will enable setting up of a unified national market for agricultural produce, which will help both buyers and sellers to trade across the country.Only if the agricultural sector is in a healthy state, will the economy grow at a more rapid pace, and the target of achieving a double digit growth rate can be realised. The policies for a second green revolution are very promising, and now the execution at the ground level will dictate their success.
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ICAI urged to develop cost beneficiary price mechanism for North East, reports Arshad KhanThe Modi led NDA government has urged the Institute of Chartered Accountants of India (ICAI) to develop a cost beneficiary price mechanism to facilitate the development of North Eastern region of the country. Jitender Singh, MoS, Development of North Eastern Region (DoNER) said that food processing industry is one sector where ICAI can develop a cost beneficiary tool to reduce the wastage.Singh also said that the government is in talk with the neighbouring country Myanmar, Bhutan and Bangladesh to uplift the food processing industry in the region. “40 per cent of fruits in the region go waste as there is no proper infrastructure to sustain them. It is a very cost effective entrepreneurship to invest in the food processing industry of the region. ICAI can play a crucial role in formulating a cost effective model for the sector,” said Singh in an event organised by ICAI in Delhi today (July 7)For the current status of the development work in the region he said,“the present government is developing a fast track model which will increase the connectivity of the region with rest of the country. Each month we are holding a meeting in the region to give the natives a message that Delhi is going hand on hand with you.” He further added that he will request the PM to prepare a draft for involving the apex cost accountant body to develop a cost effective model.PM Modi after coming to power in 2014 has formulated certain policies like changing Look East to Act East policy to improve connectivity and for rapid development of the north-eastern region. On his visit to the region in February this year he proposed Rs 28,000 crore package for laying new railway lines in the region. The appeal to ICAI is part of this.
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Charges for preferential seating, check-in baggage, meals etc are borne out of DGCA Circular of March subjected to certain ridersSharp hike in ticket cancellation charges, proposal to charge passengers for their check-in baggage or charging extra for window /aisle seats by domestic carriers: any such special charges levied on the airline passengers over and above the air-ticket price stems out of a circular issued in March this year by the office of the Director General for Civil Aviation (DGCA).On March 24, the DGCA had issued the “Air Transport Circular 1 of 2015” titled ‘Unbundle of services and fees by scheduled airlines’. The circular said: “Considering the fact that unbundling of services and charges thereto has the potential to make basic fare more affordable and provides consumer an option of paying for the services which he/she wishes to avail, it has been decided by the Government to allow following services to be unbundled and charged separately on opt-in basis. These include Preferential seating, meal/snack/drink charges (except drinking water), Charges for using airline lounges, check-in baggage charges, sports equipment charges, musical instrument carriage, and fee for special declaration of valuable baggage (allow for higher unit on carrier liability).”The circular, however, came with certain riders: “The unbundled services must be provided on “opt-in” basis and not on “opt-out” basis. Charges for the unbundled services shall be fixed amount and shall not vary with the base fare for a particular sector/flight. Changes, if any, should be announced at least 30 days in advance by the airlines; and the scheduled airlines shall display the unbundled services and charges thereto on their respective websites in a transparent and conspicuous manner.” The riders also ensured that the airlines will be responsible for ensuring that the charges for the unbundled services are displayed by the travel portals/travel agents too,” it said.Taking a cue from this circular, which sources say is born out of years of continuous presentations and convincing the aviations authorities by the domestic airlines, three Indian low cost carriers had sent in their proposal to offer lower fare for passengers who fly only with cabin baggage. This low fare option was suggested to be in addition to the regular fare offered currently where 15 kg of check-in baggage is allowed. According to DGCA officials, the proposal will be examined to see whether the low cost carriers give substantial benefit to flyers for not carrying check-in baggage and avoid a situation where the 15-kg baggage is taken without adequate advantage to the flyer.In effect, this suggestion entails the option of offering two sets of fares to the air traveller for the same destination - low fares (around Rs 500-1,000 less depending upon the airfare) for only hand baggage and the regular ones (with 15 kg of baggage allowed).A similar initiative was undertaken by AirAsia India -- a JV of Malaysia's AirAsia and Tata Group -- in 2014 summer. But the carrier had to abandon the plans after a public outcry. Now, such a plan is part of the circular issued by the DGCA itself.Hiking Cancellation ChargesBut where the domestic carriers seems to have goofed up is the unilateral hike in ticket cancellation charges by not one but three airlines - IndiGo, SpiceJet and Jet Airways. DGCA has now begin a probe into the matter, officials said. In the meanwhile, the Air Passengers Association of India (APAI) said it would also approach the Competition Commission of India (CCI) on the issue citing it as an incident of cartelisation and an unfair business practice.Last weekend, SpiceJet raised its ticket cancellation charges for both domestic as well as international travel. According to the revised fees, which came into immediate effect, the airline is deducting Rs 1,800 as cancellation fees for a domestic ticket while the charges for cancelling an international ticket would be Rs 2,250. Spicejet, reports suggest, followed in the footsteps of IndiGo and Jet Airways. Both these airlines had steeply increased their cancellation charges in April.IndiGo's cancellation charges range between Rs 1,250 and Rs 2,250 depending on the number of days left before scheduled departure. Minimum cancellation charges, which have been pegged at Rs 1,250, are applicable only if the ticket has been cancelled one month or more before the date of departure. Jet's ticket cancellation charges range between Rs 500 and Rs 2,750 depending on the class of fare.ashish.sinha@businessworld.in
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With $14 billion investment in Greece in 2014, China can be its knight in shining armour, says Nilanjan BanikMr Alexis Tsipras, Prime Minister of Greece is a worried man. His country's inability to pay IMF Euro 1.5 billion means Greece is on the verge of being denied billion of Euros worth of future loan which perhaps can save Greece from the impending financial crisis, but at the expense of following austerity measures. However, if he has to follow austerity measures such as cutting the budgetary allocation for pensions, raising domestic tax, and reforming labour laws, then he would be seen as a man reneging on his promises on the basis of which he won the election. In fact, voters in most part of Europe do not like reforms (mainly in the areas of pensions, labours and immigration), and would rather punish the parties in favour of austerity measures. The unfortunate part is, elsewhere in Europe be it United Kingdom, France, Spain, or Greece, where economic crisis is still a central part, people may have to pay a price for being myopic, and not being able to appreciate the long-term gains that may be forthcoming from institutional reforms. Because of economic crisis in Greece, there is a general sense of pessimism about future earning prospects.In order to understand this crisis, we have to step a little back into history. Soon after the Second World War, when Europe was devastated, policymakers in the region wanted to re-build Europe on the premise of socialist capitalism. The underlying idea is that when the market is at a nascent stage, the state will ensure that a labour market comes into play and jobs become available. For the elderly, and those without jobs, the state will take care through a benevolent social security system — paying unemployment benefit and pensions.The objective is noble, but to make the system efficient the government has to ensure that it collects funds through taxation to pay dole for the unemployed and pension for the retired. Dole and pension are expenditures for the government, and to pay for it, the government has to collect taxes. The principal source of tax is corporate income tax (contributing to nearly 80 per cent of the total tax collection), indirect tax (such as excise and service tax) and direct income tax (that is, taxing the working class).At the time of recession when businesses are not forthcoming, or when people find it hard to get a job, it is quite natural that tax collection will be inadequate. Therefore, the government will meet its welfare objective (that is, to pay for dole and pensions) by printing money or by borrowing. Both are perfect recipes for increasing the budget deficit and the public debt.A higher budget deficit can be sustained, provided the economy is growing. However, economic growth is continuously falling in the Euro Zone — 3.4 per cent during the 1970s, 2.4 per cent during the 1980s, 2.2 per cent during the 90s, and around 1 per cent between 2001 and 2013.A reason for this is lack of institutional reforms. In a socialist capitalist structure, wages are protected by trade unions. This is irrespective of labour productivity and firms' ability to earn profit. Add to this, is Europe's ageing population, which is likely to increase further in the future. To maintain a stable population, 2.1 children should be born to each woman in an economy, assuming an average death rate applicable to the world's population.In contrast, the figures for some Euro-Zone economies are much lower: 1.38 for Greece, 1.39 for Spain, 1.41 for Italy and 1.94 for the UK. For Spain and Greece, the over-65-year population will increase from around 17 per cent now to 25 per cent by 2030. The bottomline: Europe has fewer younger people to work, to pay for the expensive welfare programme.A natural suggestion would be to reform the labour and pension laws (dubbed as austerity measures), and slacken the immigration laws. A closer look at European democracies suggests it is run by the insiders made up of pensioners, trade union leaders, public sector workers and big farmers. The outsiders consisting of small numbers of immigrants, the youth and small private entrepreneurs have little say.It is a classic case of a socialist democracy in which the insiders are myopic, care too much about present benefits, and are deliberately voting parties to power that support their cause. On the contrary, the outsiders are quite powerless.Even issues such as changes in labour immigration laws are stalled. A flexible labour immigration clause is expected to resolve issues related to the dearth of a young skilled labour force. The brain drain from developing countries such as India and China has helped fuel economic growth in the US, but not in Europe.Lack of austerity measures in the form of institutional reforms is reflected in the form of the ever-increasing debt to GDP ratio. Cumulative public debt as a percentage of GDP for many of the Euro Zone countries is already more than 100 per cent — around 132 per cent for Italy, 177 per cent for Greece, 123 per cent for Ireland, 111 per cent for Cyprus, and 129 per cent for Portugal.Besides, dissimilar macro-economic conditions (reflected in the debt-GDP ratio) may even threaten the existence of the European Union (EU). This is because it renders a common macro-economic policy — expansionary monetary/fiscal policy during a recession and contractionary monetary/fiscal policy during an expansion — ineffective.But Europe is diverse, and when Greece is facing recession and Germany is doing well, then following an expansionary monetary policy may help Greece but will heat up the German economy. In fact, as Greece is part of EU, it does not have the autonomy of devaluing its currency, Drachma, and thereby make its exports more competitive.The only silver lining is the China factor. With Greece under firing line, China is likely to lose out most. The share of Chinese investment in the troubled European states such as Portugal, Ireland, Italy, Greece and Spain, rose from 10 per cent before 2011 to 30 per cent annually between 2012 and 2014. In fact share of Chinese investment in Europe rose from near zero in 2000 to Euro 14 billion annually in 2014. China can be a knight in shining armour for Greece.(The author, Nilanjan Banik, is with Mahindra EcoleCentrale. He is also a Fellow with CUTS International, ARTNet-UNESCAP researcher, and author of the book titled, The Indian Economy: A Macro Economic Perspective. All comments to nilbanik@gmail.com).
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After the elections are over, Paswan will once again trudge back into oblivion, writes Manish Kumar PathakRam Vilas Paswan, turned 69 on Sunday. The political giant of Bihar, outlined his main focus; to rid the state of the Nitish-Lalu combine and put in place a National Democratic Alliance government.Paswan, has forever been on the political horizon of Bihar, and yet he has never assumed a position of prominence, and has always remained a side-kick of the eventual chief ministers of the state. Paswan, started his political career in 1969, which was eight years before Lalu Prasad Yadav entered the parliament, and 16 years before Nitish Kumar was elected MLA. The current stature of the three leaders vividly explains the position Paswan has been relegated into.It is very intriguing that a person with so much experience and presence in the state, has never been in-charge of his own fortunes, and has always remained in the background, somewhere reigning in the shadows of others. Perhaps, it is do with the opportunist nature of politics, or perhaps it is the voracity of reaping benefits of power, Paswan has forever been a part in the Centre, as an alliance of the governments irrespective of the ideology (he has served under six different Prime Ministers). The political nuances have been so cleverly used by him that inspite of not having a raging presence in the state (number-wise), managing New Delhi has never been an issue for him.So, has he lost his own sheen, by trying to please the bigger leaders? Has he gambled way too far, to drag himself out of any prominence. Other leaders, from Lalu to Nitish, from Sushil Modi to Ravi Shankar Prasad have started late and have leap-frogged him. His prominence has dwindled so much that there are not even any muted utterances of him being the potential Chief Minister candidate. Also, in an attempt to stay relevant in the NDA he has withdrawn his name from the list of aspirants for the post of Chief Minister! Sums up the career of Paswan!Bihar has always thrown interesting political alignments, and Ram Vilas Paswan, has been present somewhere every time, and in these coming elections too he will important in the caste –driven politics of the state. And after the elections are over, he will once again trudge back into oblivion.
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Jan Dhan Yojana, Aadhaar and Mobile form the JAM Number TrinityWell, when this whole exercise began a couple of years ago, it was known as direct subsidy transfer. Later on, it became direct benefit transfer. Now the Narendra Modi government calls it the Jan Dhan Yojana, Aadhaar and Mobile (JAM) Number Trinity.JAM is a just a catchy acronym of a programme that allows Indian citizens to authenticate themselves by using their unique 12-digit Aadhaar numbers, to receive the subsidy amount directly in their bank accounts opened through the Jan Dhan Yojana, and to use the mobile banking platform to carry out money transactions if their bank branches are inaccessible. Joe C MathewThe seriousness, the government attaches to JAM, can be understood from the Economic Survey 2014-15, which states that if the JAM Number Trinity can be seamlessly linked, and all subsidies rolled into one or a few monthly transfers, “nirvana” or the real progress in terms of direct income support to the poor may finally be possible in India.We are not going to discuss about the merit of the programme, but about the current status of the JAM infrastructure, as that is the basic pillar on which the entire programme has been fashioned today. Let’s begin with the Pradhan Mantri Jan Dhan Yojna, an ambitious programme launched in August 2014. The target was to achieve universal financial inclusion by helping 750 million unbanked households in the country to open bank accounts by January 26, 2015. The government has certainly missed that deadline, as official data indicate that till 24 June 2015, Indian banks had opened only 98.98 million rural accounts and 65.3 million urban accounts under this scheme. Among these accounts, 85.18 million are zero balance accounts, or bank accounts opened by the poor for essentially availing the subsidy and other government social security payments – the potential JAM beneficiaries.Next comes the generation of Aadhaar numbers for the citizens and link it to their Jan Dhan bank accounts for the purpose of authentication. Official figures indicate that as on April 20, 2015, the Unique Identification Authority of India has enrolled 67 per cent of the total population. In other words, 817.82 million Aadhaar numbers were assigned to people out of a total population of 1.21 billion (on the basis of 2011 census). Not a bad achievement, though Adhaar seeding of Jan Dhan accounts stood at a dismal low, 64.18 million, at that time.Finally, the just released Socio Economic and Caste Census (SECC) 2011 data tells us that 71 per cent of rural households already own mobile connection, the third component of the JAM strategy. The SECC data on urban population is not yet ready, but the number of rural households itself is an indication of the task ahead. Over 50 million or 29 per cent of India’s 179.17 million rural households needs mobile connectivity for achieving “nirvana” through successful application of the JAM Number Trinity.The question that needs to be asked now is not whether Jan Dhan bank account enrolment, aadhaar generation and mobile penetration can create an ideal platform for financial security, but by when.When will JAM become an inclusive platform for the government to try out its experiments on providing financial security to its 800 million vulnerable population?
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Greeks voted on Sunday (5 July) whether to accept or reject the tough terms of an aid offer to stave off financial collapse, in a referendum that may determine their future in Europe's common currency.Held against a backdrop of default, shuttered banks and threats of financial apocalypse, the vote was too close to call and looked certain to herald yet more turbulence whichever way it went.The country of 11 million people is deeply divided over whether to accept an offer by international creditors that left-wing Prime Minister Alexis Tsipras, elected in January on a promise to end years of crippling austerity, calls a "humiliation".He is urging a resounding 'No', saying it would give him a strengthened mandate to return to negotiations and demand a better deal, including a writedown on Greece's massive debt.His European partners, however, say rejection would set Greece on a path out of the euro, with potentially far-reaching consequences for the global economy and Europe's grand project of an unbreakable union."I voted 'No' to the 'Yes' that our European partners insist I choose," said Eleni Deligainni, 43, in Athens. "I have been jobless for nearly four years and was telling myself to be patient ... but we've had enough deprivation and unemployment."Voting on whether to accept more taxes and pension cuts would be divisive in any nation at the best of times.In Greece, the choice is faced by an angry and exhausted population who, after five years of pension cuts, falling salaries and rising taxes, have now suffered through a week of capital controls imposed to prevent the collapse of the nation's financial system.Pensioners besieging bank gates to claim their retirement benefits, only to leave empty-handed and in tears, have become a symbol of the nation's dramatic fall over the past decade, from the heady days of the 2004 Athens Olympics to the ignominy of bankruptcy and bailout.Tsipras, a 40-year-old former student activist, has framed the referendum as a matter of national dignity and the future course of Europe."As of tomorrow we will have opened a new road for all the peoples of Europe," he said after voting in Athens, "a road that leads back to the founding values of democracy and solidarity in Europe."A 'No' vote, he said, "will send a message of determination, not only to stay in Europe but to live with dignity in Europe."Not everyone agreed."DignityY""You call this dignity, to stand in line at teller machines for a few euros?" asked pensioner Yannis Kontis, 76, after voting in the capital. "I voted 'Yes' so we can stay with Europe."Polls close at 7 p.m. (1600 GMT), with the first official projection of the result expected at 9 p.m.Four opinion polls published on Friday showed the 'Yes' vote marginally ahead. A fifth put the 'No' camp 0.5 percentage points in front. All were well within the margin of error.Called at eight days' notice, the referendum offers Greece a 'Yes' or 'No' vote on a proposal that is no longer on the table.Given the chaos of the past week, in which Greece became the first developed economy to default on a loan to the International Monetary Fund, a new bailout package would probably entail harsher terms than those on offer even last week.Anxious Greeks rallying for a 'Yes' vote also say Greece has been handed a raw deal but that the alternative, a collapse of the banks and a return of the old drachma currency, would be far worse.The 'No' camp says Greece cannot afford more of the austerity that has left one in four without a job.If Greeks vote 'Yes' to the bailout, the government has indicated it will resign -- triggering a new chapter of uncertainty as political parties try to cobble together a national unity government to keep talks with lenders going until elections are held.European creditors have said a 'Yes' vote will resurrect hopes of aid to Greece. A 'No', they say, will represent rejection of the rules that bind the euro zone nations, leaving Greece to fend for itself."If they (Greeks) say 'No', they will have to introduce another currency after the referendum because the euro is not available as a means of payment," Martin Schulz, the president of the European Parliament, said in remarks broadcast on Germany's Deutschlandfunk radio on Sunday."And how are they going to pay salaries? How are they going to pay pensions? As soon as someone introduces a new currency, they exit the euro zone."Much will depend on the European Central Bank, which on Monday morning will review its emergency liquidity line to Greek banks, keeping them afloat.The ECB could decide to freeze the liquidity or cut it off altogether if Greeks vote 'No', or if Athens subsequently defaults on a bond redemption to the ECB on July 20.An inconclusive result may sow further confusion, with the potential for violent protests."The nightmare result would be 51-49 percent in either direction," a senior German official said. "And the chances of this are not insignificant."(Reuters}
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