Maharaj: Europe must rescue itself first

Cannes - Europe has to "get its act together" and quickly produce a financial rescue plan before other governments can decide how to help, a government spokesperson said Thursday.

South Africa - along with China, Brazil and Russia - is among major developing countries that have pledged support to Europe but say they need to see details before determining how to help. Measures under discussion include having non-European investors supply money for a possible investment fund.

South Africa wants Europe to flesh out a plan during the Group of 20 meeting of major developed and developing countries that runs until Friday, said Mac Maharaj, a spokesperson for President Jacob Zuma.

"The first thing is for Europe to get its act together so we have a clear picture of what Europe is proposing," Maharaj told the Associated Press. "We are very interested in a solution and we believe the solution is overdue."

The outline of a plan presented at the start of the G20 meeting in the Mediterranean resort city of Cannes looked promising, but that is "in crisis" amid rapidly shifting developments in Greece, Maharaj said.

The crisis has put Europe in the awkward position of looking to developing economies such as China, South Africa and Russia to help finance the rescue. They are much poorer than major European countries per person but have ample cash from exports and sales of oil and minerals.

The investment fund under consideration would be created by Europe's bailout fund to buy government bonds or recapitalise banks. European leaders hope to raise money from non-European investors, especially sovereign wealth funds of China, Russia or other governments.

The chief of the EU bailout, fund the European Financial Stability Facility (EFSF), confirmed last week that China is among Asian investors that have bought 40% of the €8bn ($11.02bn) in bonds sold by the fund.

Asked in what form South Africa might contribute, Maharaj said: "How are we to say we are going to back it by doing X, Y or Z when we don't know how it will work?"Maharaj: Europe must rescue itself first

European nations need to get their own house in order before other governments can make a decision on whether to come to their aid, says Mac Maharaj.

A deputy Chinese finance minister said in Cannes on Wednesday that Beijing wants to see details of the proposed investment fund and how its money will be spent before it can decide whether to invest.

"There is no question of talking about an investment now" in the EFSF, Zhu Guangyao told reporters.

Europe's debt crisis has battered developing countries by eroding demand for their exports. Financial markets have been roiled by fears it might plunge developed economies back into recession if not quickly resolved.

"It is harming the developing world as well, and the developing world did not play any part in causing this crisis," Maharaj said. "Where are we on this matter?"