'India to benefit too from German court nod to Euro package'

NEW DELHI: With German Constitutional Court giving a go ahead to a bailout package to tackle Euro-zone crisis, its ambassador to India Michael Steiner today said the development would prove advantageous for India which should reform its key sectors to take benefits.

"Today's verdict of the German Constitutional Court is also good news for India...In globalised world, however strong your economy might become, India also needs a strong Europe as European Union is India's largest trading partner," Steiner said.

He also pressed for early signing of India-European Union free trade agreement to boost economic ties between the two partners.

"India-European Union free trade agreement if could be done quickly, would send strong signal. It would give signal that India is open to Europe and Europe is open to India," Steiner said.

Earlier, Germany's top constitutional court allowed the country to ratify the euro-area bailout fund with certain conditions.

Germany is the only country in the 17-nation euro zone that has yet to ratify the European Stability Mechanism (ESM), which is meant to erect a 700 billion-euro firewall against the spread of the three-year-old sovereign debt crisis.

With the ruling, the Eurozone will be able to move ahead with the establishment of the ESM, something like a continental version of the International Monetary Fund.

The mechanism will handle bailouts and work in tandem with the European Central Bank to buy the bonds of countries such as Italy and Spain that are straining under high interest rates.

The court, which is in the southwestern city of Karlsruhe, ruled that Germany could proceed with its contribution to the mechanism but set certain conditions, including a requirement for parliamentary approval of any increase in the agreed German contribution of 190 billion euros, or about USD 240 billion.