China Considering Bailing Out EU

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During a press conference on Thursday with Chancellor Angela Merkel, Chinese Premier Wen Jiabao raised the prospect of baling out eurozone. China is considering funding options for supporting European Financial Stability Facility (EFSF) and its successor European Stability Mechanism (ESM) that is expected to become operational in July.

China is seeing Markel’s visit as an opportunity to diversify its foreign reserves and to strengthen China-EU partnership. On the other hand, Germany has appealed for a level playing field for German firms operating in China, which have complained of restricted market access and barriers to entry in promising industries.

Germany has also asked China to influence Tehran as it relates to its nuclear program. However, Beijing has criticized EU’s unilateral sanctions on Iran, saying it is against China’s foreign policy to settle disputes with military actions or extreme sanctions.

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