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Tuesday, 12 November 2019

China welcomes Spanish bank bailout

Europe's decision to lend $125 billion to salvage its bank 'will lift confidence', says Beijing

AFP, Monday 11 Jun 2012
Views: 332
Views: 332

China, a major holder of European debt, on Monday welcomed a eurozone decision to lend Spain up to 100 billion euros ($125 billion) to save its banks, saying it would help lift confidence.

After an emergency video conference lasting more than two hours on Saturday, eurozone finance ministers issued a statement saying they were "willing to respond favourably" to Madrid's plea for help.
"We welcome the measures taken by Spain and the European Union jointly, we believe this will help restore market confidence," foreign ministry spokesman Liu Weimin told reporters.
Spain's Economy Minister Luis de Guindos insisted the handout was not a rescue but a loan that imposes conditions on the banks.
However, it marked a dramatic climbdown for Madrid, which recently denied it needed any outside aid.
China has looked on with concern as the debt crisis deepens in Europe, its largest export market.
Growth fell to 8.1 per cent in China in the first quarter of 2012 from 9.7 per cent a year earlier, due in part to Europe's debt woes that have curbed business activity.
The government has set a growth target for the world's second-largest economy of 7.5 per cent in 2012, fearing that anything below that level could trigger mass unemployment and cause widespread unrest.
China has in the past said it is looking at ways it could contribute to bailout funds to help Europe.
Liu said China, which has indicated a willingness to contribute to bailout funds, would "continue to support and participate in the efforts of Europe to overcome its sovereign debt issue".
"Since the debt crisis, the European side has taken many measures, including enhancing fiscal discipline and restoring economic growth," he said.
"It is fair to say that relevant measures have been effective."
His comments come just days ahead of the G20 meeting in Mexico's Los Cabos on 18-19 June, which Chinese President Hu Jintao will attend.
Last week, the head of China Investment Corp (CIC) -- the nation's sovereign wealth fund -- said in an interview with the Wall Street Journal that the fund had scaled back its holdings of stocks and bonds across Europe.
"There is a risk that the eurozone may fall apart and that risk is rising," Lou Jiwei was quoted as saying, highlighting Beijing's concerns.
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