Germany's Schaeuble assures India on eurozone stability

[NEW DELHI] German Finance Minister Wolfgang Schaeuble reassured India the eurozone is not about to lurch into a fresh crisis as he praised Prime Minister Narendra Modi's new government on a visit to New Delhi on Tuesday.

A widely predicted victory for the anti-austerity Syriza coalition in this weekend's Greek elections has reawakened fears of a break-up of the single currency zone.

But speaking on a visit during which he met Modi and his own counterpart Arun Jaitley, Mr Schaeuble played down fears of new instability and said there were good reasons to be optimistic.

"We have stabilised the euro area," Mr Schaeuble said during a speech in the Indian capital.

"We have overcome the lack of confidence that has affected Europe in (the) past couple of years.

"Financial markets all over the world see the eurozone has stabilised and I can tell you, it has," he added.

Syriza, a radical left-wing coalition, wants to abandon the austerity imposed on Athens as part of its 240-billion-euro (US$282 billion) bailout.

German Chancellor Angela Merkel, whose country is the effective paymaster for eurozone bailouts, is reportedly prepared to let Greece leave the eurozone if Syriza comes to power.

But Mr Schaeuble said Europe had shown it can find "solutions for specific problems" and in turn could provide a blueprint for solving "the problems of the 21th century".

He is the most senior German minister to visit since Modi secured a landslide election victory last May, promising to kickstart the Indian economy after growth hit its lowest rate in a decade.

The right-wing premier has won widespread praise from foreign governments and businesses for pledging to open up the economy and transform the country into a manufacturing hub by cutting bureaucracy and corruption as well as simplifying the tax regime.

Mr Schaeuble, who met Mr Modi late Monday, had warm words for the Indian leader whom he called "an impressive man" who exuded an "incredible dignity".

"The thrust of the new government's economic reforms is encouraging, particularly in regard to tax reforms," he said in a speech.

And speaking later to journalists, Mr Schaeuble said: "I can now understand better why he is the object of so much fascination".

Mr Schaeuble said his talks with the Indian leaders had also touched on "the events in Paris and the issue of fundamentalism" after the recent deadly Islamist attacks, without going into details.

AFP