Europe seeks China aid to boost EFSF
Beijing, China (AHN) – Europe is seeking the aid of China to boost the size of the European Financial Stability Facility (EFSF) to help eurozone nations deep in debt.
On Friday, EFSF Chief Executive Officer Klaus Regling met with Chinese officials in Beijing to tap China, which holds the largest foreign exchange reserve fund in the world. The expansion of the EFSF is one of the agreements that European leaders cut this week in a bid to contain the eurozone’s debt contagion and prevent a second global financial crisis.
Chinese Vice Finance Minister Zhu Guangyao said the country is considering investing its funds into the EFSF but sought more details from Regling. Reports said that China is considering contributing $100 billion (€70 billion) to the EFSF to boost it to $1.4 trillion (€1 trillion).
However, Regling said there have been no formal negotiations yet with China. He said he is only holding consultations to decide the terms of raising the money.
Reports said the planned Chinese contribution to the EFSF would be done through an International Monetary Fund channel. In exchange for contributing to the fund, Beijing is said to demand strong guarantees on the safety of any planned contribution.
China is a regular purchaser of EFSF bonds.
Besides China, Japan and the BRICS countries made up of emerging economies Brazil, Russia, India and South Africa are also interested in contributing to the expanded EFSF.
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