Sunday

25th Sep 2016

China: 'You can't depend on us alone to rescue Greece'

  • China would buy euro-bonds, if they were to be issued (Photo: dolmansaxlil)

A 'regular' phone call between European Commission chief Jose Manuel Barroso and Chinese Prime Minister Wen Jiabao on Friday morning (2 September) was aimed at reassuring markets that China will continue to support the ailing eurozone.

Flagging up the phone call in a regular press briefing, commission spokesman Alejandro Ulzurrun said that it focused on the current measures being taken to consolidate the eurozone and on the upcoming EU-China summit on 25 October.

Dear EUobserver reader

Subscribe now for unrestricted access to EUobserver.

Sign up for 30 days' free trial, no obligation. Full subscription only 15 € / month or 150 € / year.

  1. Unlimited access on desktop and mobile
  2. All premium articles, analysis, commentary and investigations
  3. EUobserver archives

EUobserver is the only independent news media covering EU affairs in Brussels and all 28 member states.

♡ We value your support.

If you already have an account click here to login.

"Wen expressed his support for the actions under way in Europe," Ulzurrun said, without going into details.

Since the beginning of the euro-debt crisis, China has propped up troubled countries such as Greece, Spain, Portugal and Italy through bond purchases. But as the July deal on a new Greek bail-out has opened the possibility of investors taking a 'voluntary' haircut on their investments, ratings agencies have lowered their expectations for other troubled eurozone countries, including Italy and Spain, the bloc's third and fourth largest economies, for fear that they may also face a 'partial' default.

Speaking to the EUobserver, Chinese embassy spokesman Wang Xining said that his government is "considering buying more bonds, but this depends on the performance of those bonds, on commercial considerations."

"We want to see that the eurozone is in a good shape and are willing to offer assistance in various formats, but huge sums for bonds are not realistic. You can't depend on China alone to rescue Greece."

As for the idea of eurobonds, a prospect still fended off by Germany, Wang said that China would be interested in purchasing them, were they to be offered. "But each deal will be decided on economic grounds," he added.

In its assessment whether to buy a particular bond or not, the Chinese government is taking into consideration the recommendations of credit ratings agencies, but "also the political willingness to do structural reforms" and the advice from central bankers. "It is wiser to make judgements on the basis of wider opinions, not only ratings agencies," he noted.

"The economic fundamentals in Europe are still sound and there is a great potential for the economy to pick up again and grow, provided structural changes and budget controls are put in place," the spokesman concluded.

Investigation

Diesel cars still dirty, despite huge EU loans

The European Investment Bank lent billions to carmakers, in part to clean up diesel cars. But diesel cars are still dirty, prompting questions if the money was well spent.

EU redoubles attack on roaming charges

After an embarrassing U-turn last week, the EU commission has proposed to abolish roaming charges by June next year. Only "abusive" clients to pay.

Stakeholders' Highlights

  1. GoogleBringing Education to Refugees in Lebanon With the Clooney Foundation for Justice
  2. HuaweiAn Industry-leading ICT Solution Provider and Building a Better World
  3. World VisionUN Refugees Meeting a Wasted Opportunity to Improve the Lives of Millions of Children
  4. Belgrade Security ForumCan Democracy Survive Global Disorder?
  5. YouthProAktivEntrepreneurship, Proactivity, Innovation - Turn Ideas Into Action #IPS2016
  6. GoogleTrimming the Waste-Line: Weaving Circular Economy Principles Into Our Operations
  7. Crowdsourcing Week EuropeDon't Miss the Mega Conference to Master Crowdsourcing, Crowdfunding and Innovation! 10% Discount Code CSWEU16
  8. Martens CentreFighting Terrorism: Do we have what it takes? 26 September, Brussels
  9. ACCAKaras Report on Access to Finance for SMEs in a Capital Markets Union
  10. Centre Maurits Coppieters"I still believe we can change Europe" Said David Grosclaude
  11. World VisionThe Child Protection Index to be Launched in Brussels on 28 September 2016
  12. HuaweiDigital Transformation: Unleashing Europe’s Potential