or please link to us
Greece has a substantial impact on the ever nervous markets these days.
Interestingly, the help offered to the country is based on interest-bearing loans, which likely will go along with cost cuttings to service the debts causing all kinds of social hardships. This is the standard recipe.
How help would need to look according to Islamic law and morals?
1. Interest-bearing loans are a clear no go. Interest-free loans could be an option, even for the whole European Union for mutual support situations.
2. Fostering investments based on profit-/loss sharing. Greece could undertake a capital raise for state owned companies and infrastructure - the other EU countries could become investors rather than creditors.
The first option is a clear cut signal for solidarity (which an interest bearing loan is not); the second option has three effects to be balanced: First the debt/equity ratio of Greece would immediately improve and their credit standing therefore being restored, the additional funds should like an economic stimulus program uplifting the economy; the third effect is to be avoided, which is the feeling of a potential sale season of cheap assets to foreign countries.
If this strategy would be followed with heart and mind, Greece would face less frictions socially, economically and the increased nervousness in the market could be healed to our mutual benefit in a globalised world. Aside from the International Monetary Fund, we need an International Equity Fund, sharing the profits and losses to create a solid financial framework.
Could anybody point me to papers or articles discussing such thoughts deeper? Any comments why this is not being discussed in mainstream media?
Michael Saleh Gassner