German apex court ruling on EU debt will benefit India, says envoy

September 12th, 2012 - 10:47 pm ICT by IANS  

New Delhi, Sep 12 (IANS) Germany’s apex court judgment upholding European Central Bank’s decision to buy unlimited sovereign bonds of euro zone countries under financial stress will also benefit India, the German envoy to India said Wednesday.

The German Constitutional Court ruled Wednesday that the two major instruments for resolving the European debt crisis - European Stability Mechanism (ESM) and the Fiscal Compact - are fully in accordance with the German Constitution.

“Today’s verdict of the constitutional court is also good news for India. India needs a strong, solid Europe as the EU is India’s largest trading partner,” Germany’s Ambassador to India, Michael Steiner said here.

“Don’t underestimate Europe, the fundamentals are pretty strong. Indian economic growth depends a lot on foreign investment and on international trade.”

The ESM provides for buying up to 780 billion Euros (around $1 trillion) sovereign bonds of euro zone countries which are under financial stress.

The Fiscal Compact envisages a singular economic governance policy for the euro zone including monetary policy, and further integration.

Steiner also said the negativity surrounding the investment environment in India can be solved with an early agreement on the free trade agreement (FTA) between India and the European Union (EU).

“India is actually going through difficult economic times, therefore a EU-India Free Trade Agreement in due time could be an excellent signal to the markets, to the benefit of both our continents,” he said.

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