Euro Zone Crisis
The Eurozone crisis was triggered in 2009 when Greece's debts, left by its previous government, reached a record 300 billion euros, leaving the southern European economy with debt levels more than four times higher as a proportion of gross domestic product than the official euro zone cap of 60 per cent of GDP. Since the original problems were uncovered, Greece has been bailed out twice, and lenders have also had to rescue Ireland and Portugal. In the latter half of 2012, Spain was looking increasingly vulnerable but its government repeatedly denied that it needed a bailout. Cyprus's finances were also in the spotlight in late 2012, and early 2013.
China 'to play its part' in euro zone debt crisis
Wen says both China and EU against trade protectionism
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Chinese Premier Wen Jiabao said Thursday that Beijing will maintain its efforts to help resolve the euro zone debt crisis, after months of investing in European sovereign bonds.
“China will continue to play its part in helping resolve the European debt issue through appropriate channels,” Wen told a business summit after political talks with European Union leaders in Brussels.
“In the past few months China has continued to invest in bonds of European governments... and discussed ways of cooperation with the ESM,” Wen said, referring to the European Stability Mechanism, a new 500-billion-euro rescue firewall set up by euro zone leaders and due to become operational next month.
“Europe is on the right track in tackling its debt issue,” Wen told the audience. “What is crucial now is to fully implement the reforms” it has agreed on economic governance, he said.
Wen’s remarks saw a shift in tone from the “serious concerns” about spillover effects hurting China that he had expressed just three weeks earlier when German Chancellor Angela Merkel visited Beijing.
Almost half of all European exports to China come from Germany, and a quarter of all European imports from China are into Germany.
Wen highlighted that China had pumped tens of billions of dollars into the International Monetary Fund this summer, as global economies joined forces in a bid to limit the damage from a global economic downturn.
And he said this was done for “strategic” reasons, saying the “essence” of China’s “stable” relationship with the EU bloc was “long-term” and “not affected by ideological differences or temporary setbacks.”
Having visited 18 EU member states since 2003 to cement a trading relationship worth a billion euros a day, Wen said the present challenges also presented “huge opportunities” on both sides.
While the economic picture was at a “critical juncture,” China and the EU were working on a host of levels to “scale-up” trade.
The levers through which this would be achieved, Wen said, involved two-way investment with a “need to expand co-operation in infrastructure development” that could see Beijing invest in new EU project bonds.
Likewise investment in technological innovation, where he cited nuclear energy or the information technology sector, or European offers of expertise whether in smart cars or sewerage as China steps up urban planning.
Avoiding trade protectionism
Both China and the European Union reject trade protectionism, Wen also said on Thursday after a summit meeting with EU leaders.
“We both (China and the European Union) follow free and open economic and trade policies, reject trade protectionism and work to advance economic globalisation,” Wen told a business conference on the sidelines of the summit.
He also said he believed Europe was able to overcome its debt crisis, and that China continued to invest in European government debt.
“Europe is on the right track in tackling its debt issue, and what is crucial now is to fully implement all the policy measures,” Wen said.
Earlier in the day, Wen met European Commission President Jose Manuel Barroso and Herman Van Rompuy, president of the European Council, which represents national governments.
The leaders were meeting against a background of growing trade disputes between China and the European Union.