Euro zone debt crisis a worry, says PM

Euro zone debt crisis a worry, says PM

New Delhi: Prime Minister Manmohan Singh on Wednesday expected the summit of world’s 20 leading economies (G-20) to signal a “strong and coordinated approach" to put the global economy back on track, while addressing medium term structural issues.

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“It is important for the Cannes Summit to signal a strong and coordinated approach to put the global economy back on track, while addressing medium term structural issues," he said in a departure statement before leaving for the two-day Cannes Summit in French Riviera starting on Thursday.

The Prime Minister said much more needs to be done to combat the debt crisis despite measure of confidence being restored in the market after the twin summits of the European Union and Eurozone a few days ago.

Noting that the Eurozone is a historic project, he said, “India would like the Eurozone to prosper, because in Europe’s prosperity lies our own prosperity".

Developing economies such as India need a conducive global economic environment to address the vast challenges they face, he said.

“In an increasingly interdependent world, we have to be wary of contagion effects and the import of inflationary pressures in our economy. We need to ensure that developing countries have access to requisite funds through multilateral development banks and to investible surpluses to meet their infrastructure and other priority needs," Singh said.

The issue of global governance will also come up for discussion during the G-20 meet.

“This is an issue of importance to India, and we will work with others to develop effective and representative global governance mechanisms and carry forward the process of reform of the international monetary and financial system," he said.

During his visit, the Prime Minister will hold a bilateral meeting with French President Nicholas Sarkozy. He would be also meeting British Prime Minister David Cameron, Australian Premier Julia Gillard as also EU leaders Herman Van Rompuy and Jose Manuel Barroso.

Singh, who will be at the G-20 summit for the sixth consecutive time since it was first hosted by the US in 2008, is also likely to push through India’s agenda for voluntary exchange of tax information to curb black money.

Singh is due to return home on Saturday night.

The Summit will be dominated by efforts by European leaders to resolve the sovereign debt crisis after the 17-nation Eurozone sealed a deal last month critical for global economic recovery.

A report from Athens said Greece has plunged the Eurozone back into crisis with a call for a referendum on a debt rescue package reached just days ago with difficulties.

The Summit hosted by Sarkozy is expected to seek commitments from all G-20 members on growth and on re-balancing public finances.

US President Barack Obama, Cameron and Chinese President Hu Jintao will be among the world leaders at the critical summit.

Singh is expected to urge the G-20 to take the necessary steps to address current economic instability and to take concrete steps to put open trade, jobs, social protection and economic development at the heart of the recovery.

While underscoring the need to avoid protectionism, he is expected to advocate the importance of an open, transparent and rules-based multilateral trading system as a driver of global growth.

The economist-turned prime minister, whose advice is often sought at the G-20 high table, is expected to give this prescription for providing the necessary confidence to global markets and ensuring a more stable global economic environment.