Debt Crisis: China considers backing European bailout by investing in funds
CHINA is considering backing the European rescue by investing in bailout funds, Premier Wen Jiabao said today.
He said the country could become more involved in the European Financial Stability Facility and the new European Stability Mechanism, or bailout funds, but he made no firm commitment.
He made the comments at a joint briefing with German Chancellor Angela Merkel who is visiting Beijing, according to reports from Reuters.
Mr Jiabao added that the country is still considering how it could lend support and said it is “urgent” that the debt crisis be resolved.
The €500bn ESM comes into place in July and is a permanent bailout fund – it replaces the EFSF which was used to lend to Ireland, Portugal and Greece.
Meanwhile, Greece is still negotiating with its private creditors for a deal on its debt.
It is understood that while agreements have been made on the bulk of the issues, there are ongoing negotiations in relation to the recapitalisation of banks and wages.
If a deal is done, it will pave the way for a much-needed new tranche of €130bn in bailout funds for Greece.