In These New Times

World News

26th October, 2011

See also:

Resurgent European imperialism and the Global South

Klaus Regling, chief executive of the European Financial Stability Facility (EFSF), will be in the Chinese capital on Friday, the EU delegation in China said in a statement.

The announcement came while European leaders prepared to hold a second emergency summit later on Wednesday as they struggle to find ways to boost their defences against the region’s worst financial crisis in decades.

It did not say who Regling would meet or give reasons for his visit but European leaders have been toying with the idea of asking China, Brazil and other top emerging economies to come to their rescue.

The eurozone wants to boost its 440 billion euro- ($A589 billion) rescue fund to convince markets it has the means to protect highly indebted nations such as Italy.

The state-owned China Daily newspaper, citing a source close to EU decision makers, said on Wednesday that China and other top emerging economies had agreed to help eurozone countries by contributing to the bailout fund.

Leading emerging economies would help to finance the EFSF through the International Monetary Fund (IMF), which would boost their voting rights in the Washington-based lender, the paper said.

The agreement may be written into the final document at the second summit, the unidentified source told the English-language newspaper.

Chinese foreign ministry spokeswoman Jiang Yu said China has an “open attitude” and “will discuss with the European side multiple ways of cooperation”.

“We are ready to have broad-based cooperation with the European side, tap co-operation potential and promote co-operation for common development,” Jiang told a regular media briefing.

Officials at China’s finance ministry, central bank and foreign exchange regulator were not immediately available to comment when contacted by AFP.

China has repeatedly pledged support for the euro and eurozone countries – major buyers of Chinese exports – as it seeks to shore up the value of its investments and demand for its products.

A meeting between Chinese and European leaders scheduled to take place in China last Tuesday was postponed to make way for the second summit on the eurozone crisis.

European Union leaders and IMF chief Christine Lagarde hailed “good progress” after a first summit on Sunday and EU president Herman Van Rompuy said there were two models still on the table.

One is a scheme whereby the fund would insure investors against potential losses on their bond holdings, a bid to tempt nervous traders back into buying the debt of shaky economies.

Another option would create a second fund to attract contributions from non-European nations such as China, although this has divided EU countries.