Mian Shakeel Aslam---When the dust settled following the recent agreement was made to the euro zone to resolve the debt crisis, French President Nicolas Sarkozy, admitted it was a "mistake" was to take the Greeks participating in monetary union.
"To be clear, that was a mistake," Sarkozy told French television.
"Greece was in the € with the numbers that were wrong and the economy was not ready to accept the euro zone membership. It was a decision that was made in, I believe, 2001, for which we are now paying the consequences."
It has come to an agreement in Brussels on Wednesday, cut Greek debt, recapitalizing European banks and more than double the European Union's resources bailout fund to handle future sovereign defaults.
"This is good news we have an agreement," said the German Bank economist Gilles Moec. "If Europe sets their heads, they actually begin to cooperate."
However, speculation is rife about China's role in the success of the plan, with suggestions that will provide capital to strengthen the euro - a scenario that Sarkozy has no worries.
"If the Chinese, who have 60% of world reserves, which want to invest in euros instead of dollars, why reject it?" 'I asked.
China, the consensus of the EU summit, whose main elements are a 50% reduction in the value welcomes Greek government bonds to attract European bank recapitalization measures and plans to raise capital for already overburdened rescue European Fund Financial Stability Fund to reduce the debt of Greece from the current astronomical 160% of the current economic situation and 120% of the total economic output in the next 10 years.
China showed that, in your best interest, can contribute to a solution, but does not mention any concrete plan to do so.
"We believe that as the world's largest economy, the sustained, sound and healthy economy of the EU and the euro area is essential for global economic recovery," said Foreign Ministry spokesman Jiang Yu said in a conferencepress on Thursday. "We are also willing to cooperate with the EU in order to overcome the difficulty."
However, China will support the capacity of Europe depends on the reliability of a system to ensure Daokui, said Li, member of the Chinese Central Bank Monetary Policy, the Financial Times. "It is long-term interest and intrinsic China to help Europe as our main trading partner, but the Chinese government's main concern is how to explain this decision of our people," said Li.
Li added that China may tax incentives as a lever for Europe to criticize China's monetary policy, which is often undervalued and unfairly criticized China's exports benefit from the use of deterrence.
Europe aims to attract capital from sovereign wealth funds, particularly the developing countries like China and Russia, in addition to 440.000.000.000 € bailout fund, but analysts note that the structure of these investments is still unknown.
In a telephone conversation with Sarkozy on Thursday, Chinese President Hu Jintao made no mention of specific plans to invest in the system, but praised Europe's progress in resolving the debt crisis.
Posted By: Mian Shakeel Aslam
Source: http://edition.cnn.com/2011/10/28/business/eu-debt-china/index.html?hpt=hp_t2
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