Who Will Pay the Bills?

Mohit Satyanand asked this interesting question in Outlook Money as to why the same government that considers it necessary (and even desirable) to subsidize diesel and LPG in the name of protecting the poor wants to, on the other hand, charge the “correct” (read higher) price for telecom spectrum. After all, he argued, the cellphone revolution has benefited the poor just as much as everyone else, so any increase in spectrum price will impact the poor too (the telecom companies would pass on the increased cost of spectrum to the consumers by hiking telecom tariffs).

I guess the answer is that the 2G scandal has forced the government to switch to market economics in case of telecom. The day we have an equivalent scandal in the fuel segment, maybe we’ll see fuel prices being determined by market forces too.

Then again, as Greece now threatens, countries often prefer populism over paying the bills, prefer to default on their loans than to pay their creditors. You could explain what the Greeks are doing is one of the flaws with democracy: populism trumps doing what’s necessary. But I don’t get why the new French president has joined hands with the Greeks and called the German calls for austerity a bad thing. Here I thought that the French and Germans were jointly trying to save the Euro, but now it looks like that’s only Germany’s job.

All of Europe loves to hate and curse the Germans. But when it comes to saving their a**, then they go running to the Germans. Talk about ingratitude. Maybe the rest of Europe assumes that Germany can’t allow the Euro to fail and will keep bailing everyone out. To put it differently, maybe the rest of Europe believes that PIIGS can fly (with help from the Germans whom they love to revile)!