Emerging economies 'to help bail out EU'

Updated: 2011-10-26 07:40

By Fu Jing (China Daily)

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BRUSSELS - Leading emerging economies such as China have reportedly agreed to help the European Union increase its bailout fund through the International Monetary Fund (IMF), said a reliable source close to EU decision-makers.

If this happens, China and other emerging economies may obtain more influence in the global financial system ahead of G20 summit scheduled for Nov 3 to 4 in Cannes, France.

Within the IMF, an increased contribution means more voting rights. Emerging economies have long calling for a bigger say in the organization, which has been dominated by developed economies and in which the United States has a veto.

Meanwhile, Chinese Foreign Minister Yang Jiechi pledged to support the EU's efforts to tackle the sovereign debt crisis and said he hoped the EU would take tangible measures to restore market confidence, when he met visiting EU foreign affairs chief Catherine Ashton in Beijing.

The source said the EU may write the agreement into the final document at the summit of European leaders, which will convene on Wednesday.

The leaders already achieved consensus on Sunday on the framework of the comprehensive bailout strategy, which includes job creation, an increased bailout package, the Greek bailout, bank recapitalization, crisis contagion prevention and economic governance.

The framework gives the EU much room for maneuver to mobilize resources from its external partners to resolve the debt crisis.

"A country like China has roughly the same position as the EU, and that consensus will be reflected in the final document after the summit on Wednesday night," said the source.

But the source didn't go into the details of China's involvement in the bailout strategy.

Chinese officials contacted by China Daily said they have been calling on the EU and its member countries to remodel their unsustainable economic strategy.

And China is also keen for them to open their doors wider to facilitate the country's direct investment, similar to China's long-time readiness to attract European investment.

In separate development, Yang said on Tuesday in Beijing that China backs the EU's efforts to tackle the sovereign debt crisis and hopes it will take tangible measures to restore market confidence.

China and the EU should further expand and deepen practical cooperation, Yang said, noting that the two sides share the same or similar development goals and strategies.

Ashton said the EU is discussing how to deal with the debt crisis and expressed appreciation for China's understanding and support, stressing that the EU takes relations between the two sides seriously.

The EU admires the achievements China has made and is willing to cooperate with China more closely to meet global challenges and promote common development, Ashton said.

Xinhua contributed to this story.

China Daily

(China Daily 10/26/2011 page11)