Fin24

China tells Europe to tackle crisis

2011-10-21 12:15

Beijing - Chinese Premier Wen Jiabao urged Europe to prevent its debt crisis from spreading across the bloc and to stabilise its currency and financial markets, the Xinhua news agency reported on Friday.

Wen’s remarks come before a weekend crisis meeting by European leaders on how to increase a eurozone bailout fund that would tackle the bloc's debt problems. But deep divisions between France and Germany threaten to foil the meeting.

“The most urgent task is to take decisive measures to prevent the debt crisis from spreading further and avoid financial market turbulence, a recession and fluctuations in the euro,” Wen reportedly told European Council President Herman Van Rompuy in a telephone call.

With about a quarter of its $3.2 trillion reserves estimated to be invested in the euro, China has vested interests in seeing Europe avoid further market volatility.

Europe is also China’s biggest trading partner, and the region’s crisis has already taken a toll on Chinese exports, which grew at their slowest pace in seven months in September.

Wen’s latest comments sounded a bit more urgent than other recent remarks from Beijing, which has repeatedly voiced confidence that Europe can overcome its problems.

“I notice that EU leaders have shown strong political will,” Wen said.

“I hope that EU leaders could turn their political will into concrete and effective action to safeguard the stability of the euro and European markets to boost market confidence.”

During the phone call, Rompuy also told Wen that European officials had to postpone an annual summit with China to allow European leaders to attend a crisis meeting about the bloc's debt problems.