India can learn from the German 'Yes' vote

India can learn from the German 'Yes' vote - The Economic Times

• There are two reasons to commend the German 'Yes' vote on strengthening the European Financial Stability Fund (EFSF).
• The first is in the economic arena, the second, in the political arena.
• Take the economic reasons first. The vote boosts the EFSF's firepower and offers reasonable reassurance that there is no convincing reason to write off the eurozone.
• Germans finally relenting and agreeing to boost the Fund's lending capacity from 250 billion euros to 440 billion euros, those doubts should now be set at rest.
• An empowered EFSF will be able to act as lender of last resort and ride to the rescue before things go out of hand. At least it will be able to ring-fence eurozone countries to limit, if not prevent, financial contagion. But it would be naive to assume the beefed-up EFSF is a complete answer to Europe's problems.
• the vote is remarkable for the example of strong leadership it provides.
• Faced with a rebellion in her backyard, Chancellor Angela Merkel chose to push ahead and seek allies for her cause amongst the opposition.
• We in India saw a similar statesmanship from the Prime Minister in the context of the Indo-US nuclear deal when he chose to defy the Left parties to seal an advantageous deal for India.
• the economic situation in India today may not be as critical as in Europe. But the in-fighting in the Congress and the growing sense of policy drift are no less serious. The Prime Minister must lead from the front