India willing to play a supporting role to help Eurozone

India today said it is willing to play a "supporting" role in any mulilateral effort to help Eurozone tide over its debt crisis after European leaders sealed a deal crucial to world economy to fix the lingering problem.

Planning Commission Deputy Chairman Deputy Commission welcomed as positive the "important" deal clinched by European leaders at their summit early this week shoring up the 17-nation Eurozone's bailout fund, pledging new funds for Greece and pushing banks to share the pain to combat the sovereign-debt crisis.

"We are willing to do our bit whatever supporting role which the international institutions would need to support the Eurozone...We would support mulilateral efforts," Ahluwalia said replying to questions by newsmen.

Ahluwalia was briefing the media ahead of the sixth Summit of the Group of 20 industrialized and emerging market economies(G-20) to be attended by Prime Minister Manmohan Singh and other world leaders including US President Barack Obama and British Premier David Cameron.

He has been designated as the 'sherpa'--the personal representative of a Head of State or Government--for the two-day Summit starting in Cannes in France on November three. G20 nations represent 85 percent of the global economy and account for two-thirds of the world population.

Ahluwalia said the impact of any dramatic slowdown in growth of European economy if the debt crisis is not resolved will be no different from its fallout on any other country. He however said there will not be a huge impact because the country is not exclusively dependent on Europe. "There will be some impact but not a huge impact," he added. Ahluwalia also hoped the Cannes Summit will see a further consolidation of the Mutual Assessment Process(MAP--a new multilateral surveillance procedure.

The so-called MAP aims to reduce risks to the system by making the world's largest economies accountable--to each other--for ensuring the global consistency of their economic policies.

Ahluwalia was confident that the MAP, widely described as a 'systemic vision" for the International Monetary Fund's(IMF) surveillance procedure, will acknowledge that India was on the "right path" in managing its economy.

There have been difficulties involved in making forward looking commitments asked for in the G20 Mutual Assessment Process (MAP), especially for outcomes over which governments do not have full control, such as fiscal deficits and current account imbalances.

Ahluwalia was of the view that the Eurozone did not see "signals" of a threat to the region falling into a debt hole after European banks bought sovereign bonds hoping there will be no debt servcing problem.

About the summit of G-20, Ahulwaia said the grouping is struggling with a "shifting" set of circumstances and repeated India's pleas to make international financial institutions more representative.

The G-20 leaders are expected to work on efforts to bring robustnesss to the world economy, he added.

He was of the view that the short term prospects for the growth aof global economy are not good.

IMF chief Christine Lagarde warned this month the weakness of advanced economies was "beginning to hit emerging countries" that had supported the world economy during the previous economic crisis.

Ahluwalia stressed the need for creating a global environment which is fair and conducive for a rapid growth of the world economy.

The G20 leaders are also expected to give a call to remove obstacles to world growth and avoid slipping back into protectionism. The Eurozone problem is not specific to the continent but is a global problme with a spillover effect, Ahluwalia said.