Euro zone crisis grave threat to global economy: India

Cannes: India on Friday said that Eurozone crisis is a potentially grave threat to stability of global economy, but made it clear that management of the crisis is primarily responsibility of the European countries.

"The crisis in the Eurozone is a potentially grave threat to the stability. There was obviously too little time in the Summit to resolve all the issues," Prime Minister Manmohan Singh said in his press conference at the end of the G-20 Summit here.

He said India has a "vested interest" in smooth functioning of the Eurozone, which must have a centralised institution that can act as a "lender of last resort" in times of crisis. Singh suggested an institutional mechanism which can act as a "lender of last resort".

The Prime Minister said that the European Central Bank at present is not allowed to lend directly.
The Heads of 20 most influential economies deliberated for two days in the midst of worsening European crisis triggered by the increasing threat of default by sovereign members of the Euro zone like Greece.

"…Global economy has weakened particularly in advanced economies leaving unemployment at unacceptable levels… Tensions in the financial markets have increased due mostly to sovereign risks in Europe; there are also clear signs of slowing in growth in emerging markets," the Communique issued after the Summit said.