Euro will emerge stronger: Belgian ambassador

Kolkata : Days after the Irish economy was bailed out with a 85 billion-euro package and murmurs about the next nation to give in gathers wind, the Belgian ambassador to India on Friday said that the European Union (EU) will weather the crisis and emerge stronger.

Belgium?s growing gross debt, which is set to surpass its gross domestic product (GDP) by the end of the year, has been fanning speculation that the country could possibly be the next to ask for a bailout after Greece and Ireland.

According to the International Monetary Fund (IMF), Belgium?s public debt will reach 100.2 percent of its GDP this year making it the third highest within the EU after Greece and Italy.

Add to that a political crunch as seven parties try to negotiate a coalition government with little sign of a consensus since the last election in mid-June, and the facts make investors understandably nervous.

The Belgian ambassador to India Jean Deboutte, however, said that even though the debt situation was bad, it was not catastrophic.

Belgium is one of the few countries in the common-currency bloc which can actually afford a debt that size since most of its borrowing is internal due to a ?very high? savings rate of its people, Deboutte said.

He said, ?Yes, the situation is bad and yes, we would like to have a debt lower than 60 percent as prescribed in the EU norms, but the condition we are currently in is not fatal.?

?Just to give an example: Japan has a debt that?s over 200 percent of its GDP and it seems to be doing pretty fine,? he added.

The ambassador was in Kolkata on Friday at an interactive session with Confederation of Indian Industry (CII) members and reporters organised by the trade body, following a meeting with the state?s Chief Minister Buddhadeb Bhattacharjee.

Deboutte said that he was looking for investments in Belgium from India and vice versa to boost the bilateral trade between the two nations which stood at over 7 billion euro in 2009.

With clean energy and jewellery being the frontrunners for the trade between the two nations, he said that there was immense potential in collaborations in information technology as well. He also billed Belgium?s central location in Western Europe as an incentive for prospective investors.

The ambassador further said that a free trade agreement (FTA) between India and EU will upgrade the trade between the two nations.

Assuming talks on the FTA progress well during the upcoming EU-India summit, which begins in the Belgian capital city on Dec. 10, he said that the deal should fall through within the next two years.

For Belgium, like most of other nations from the EU, the economic downturn is definitely not over; And even though analysts say the FTA is expected to prove to be a better deal for India, new vistas of commerce are crucial for the bloc to get into greener shores.