By Arvind Padmanabhan, IANS,
Cannes: With non-member Greece throwing the G20 Summit here into a tailspin, India Thursday called for urgent steps to resolve the Eurozone crisis and said emerging economies cannot be made to suffer its spillover effects.
India also made a strong plea for tackling the issue of illicit money stashed away in tax havens abroad, calling it a serious problem that takes away developmental funds of poor and emerging economies.
“The announcement of a referendum by the government of Greece has upset the calculations,” Prime Minister Manmohan Singh told the summit, referring to the decision by Athens to go to the people regarding its bailout package.
“Although the Eurozone countries have the principal responsibility for dealing with these problems, the dangers from spillovers from the Eurozone to the rest of the world are a matter of concern for all of us,” the prime minister added.
Greek Prime Minister George Papandreou had sent the jitters down the global markets when he said Monday that the latest European package to help it out of the crisis would be put to a referendum.
Reports now suggest the referendum proposal has been scrapped.
Indian markets, too, reacted to this news and the key sensitive index (Sensex) of the Bombay Stock Exchange (BSE) had dipped 215 points, or 1.2 percent, Monday, and traded flat during the subsequent days.
According to Manmohan Singh, the growth rate in India had already decelerated and was expected to be in the region of 7.6 and 8 percent, combined with high levels of inflation where the annual increase in food prices have topped 12 percent now.
“We hope to go back to higher growth in 2012-13, together with a moderation in inflation. Our medium term strategy focuses on a revival of investment especially in infrastructure, and continuing efforts to reduce our fiscal deficit,” the prime minister added.
Manmohan Singh, who has attended all the six G20 Summits thus far, also sought to draw the attention of the leaders to the serious problem of tax evasion and illicit flows that have seen the migration of tax bases in developing countries abroad.
“G20 countries should take the lead in agreeing to automatic exchange of tax related information with each other, irrespective of artificial distinctions such as past or present, for tax evasion or fraud, in the spirit of our London Summit that ‘the era of bank secrecy is over’.”
The G20, originally formed at the level of finance ministers and central bank governors in 1999 after the East Asian economic crisis, has assumed significance after it was elevated to a summit-level forum in 2008 after the ongoing global financial crisis.
Besides India and France, the G20 comprises Brazil, the US and Canada, Argentina, Australia, China, South Korea, Germany, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, Turkey, Britain, and the European Union.
Greece is not a G20 member, but was invited to the G20 Summit.
(Arvind Padmanabhan can be reached at [email protected])