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German envoy offers sneak preview of Euro advantages, asks India to gear up

Dr Heinrich-Dietrich Dieckmann, German ambassador to India, has said that introduction of the Euro currency will benefit India and other countries of the Third World considerably by way of reduced risk, lower interest rates, lower transaction costs and improved access to foreign capital.

Addressing a meeting organised by the Indian Merchants' Chamber in Bombay today, he said the unification of Europe is not only important for Germany, but also to the world for many reasons.

The Euro will offer an alternative to the US dollar as the most acceptable, stable international currency for Asian and Latin American countries. These countries, he said, ''do not belong to an official fixed exchange rate system, but peg their currencies to a foreign currency basket'', he said.

He said Europe will be as strong as, if not stronger than, the US in the International Monetary Fund. That would also mean that Europe will be politically more ''powerful''.

''Economy is the father of everything,'' he said. All power, including political power, flows from economic power. Even without possessing nuclear arms, Japan has become a strong political power in the world today, he added.

Citing the decision of the Reserve Bank of India to convert a part of its foreign exchange reserves into the Euro, he said European Union is its most important trading partner, and switching to the Euro as its international currency will reduce transaction costs of Indian companies substantially. He stressed that Europe could not afford to become a ''fortress'', and declared that Germany's interests could be served only through an ''open world economy''.

There is a huge untapped potential of German investors interested in India and that the conditions for foreign investment should be improved.

Foreign investors are faced with the same problems as Indian investors: weak infrastructure, too much bureaucracy and over-regulation.

An investor can spend his yen or German mark only once, in India or in China, in India or in Brazil, and in India or in Germany. There is a strong competition in the world for limited resources. Germany believes in India's potential to become a major player in a globalised economy and wants India to become one of Germany's major partners, he said.

UNI

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