Emerging markets including India are resilient, says Dariusz Kowalczyk, Senior Economist and Strategist, Credit Agricole CIB. India has very strong domestic demand which will allow it to continue to expand even in case that global situation deteriorates, he adds.

Investors world over are quite hopeful that the Greek austerity measures will be passed and Greek will not become the first euro zone to default.

Kowalczyk says the situation is key for global market sentiment. Everybody is holding their breath to see whether the vote in parliament will allow for the passage of further measures that will help Greece receive more assistance from international donors.

Also read: Emerging market's inflation could hit double digits, says Mobius

Below is the verbatim transcript of his interview with CNBC-TV18's Sonia Shenoy and Reema Tendulkar. Also watch the accompanying video.

Q: What are you making of the situation across Greece and the kind of impact it would have on the global markets?

A: The situation is key for global market sentiment. Everybody is holding their breath to see whether the vote in parliament will allow for the passage of further measures that will help Greece receive more assistance from international donors. It is critical. We are hopeful that Greece will manage to sort out its political tensions as well as the fiscal situation. Our sense of the scenario calls for such outcome. If this is the case then the risk on environment will return. But obviously if things increase to deteriorate, we can have further weakening of global market sentiment. So, everything depends on those votes.

Q: If the austerity measures do comes through then are you expecting to see a relief rally in global markets or do you think all of it has been priced in?

A: No, it has not been priced in. The recovery in sentiment that we saw overnight was only to remove this. A lot money has been taken off the table over the past several weeks. If investors come to the conclusion that the situation in Greece is improving in the longer-term in a more lasting way then definitely we will see a relief rally that will last for many sessions.

Q: The other point, which was pertaining to what is happening with respect to the debt crisis in Greece, is the fear of a contagion. With the assumption that maybe some resolution is reached, these austerity measures are passed, is atleast the debt fears in the entire peripheral euro zone put behind in the medium-term or you think they will be cropping up anytime soon?

A: I think that the issue of contagion is crucial here because Greece is still the weakest link in Europe right now. If that weakest element appears to pass the troubled waters then sentiment will improve for the others because if Greece doesnt solve then why would the others solve. So, if fears of contagion would definitely dissipate in such a scenario. We would basically have a relief rally across European peripheral bond market.

Q: How are you reading the emerging markets, particularly something like India because India has been fairly resilient for the past two days or so?

A: Indeed, emerging markets including India are resilient, especially given that India has very strong domestic demand which will allow it to continue to expand even in case that global situation deteriorates. This happened in the last crisis, this is what investors would expect this time around as well. So, this is an explanation of the resilience of Indian assets. But obviously no market is safe from contagion even though some economies may continue to grow under negative scenario for Europe, asset prices would suffer if the European situation deteriorates.