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What China thinks of the euro

Friday, August 26, 2011 - 01:33

China declares confidence in the euro while French Finance Minister Francois Baroin dismisses talk of a euro zone bond on a trip to Beijing.

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The euro zone could do with a confidence boost -- but French President Nicolas Sarkozy had to travel all the way to China to find it. (SOUNDBITE)(French) FRENCH PRESIDENT, NICOLAS SARKOZY, SAYING: "I can tell you that President Hu Jintao has given a definitive declaration of his confidence in the euro zone and the euro." And China's leaders are certainly banking on the euro zone's success. A quarter of its 3 trillion dollars of foreign exchange reserves are in euros, and China wants quick action to secure its investments. But so far, the French president and German chancellor Angela Merkel have put on hold what many investors say is the best solution for Europe: a common euro zone bond to give weaker members access to cheaper funds. In Beijing, that message underlined by French finance minister Francois Baroin. (SOUNDBITE) (French) FRENCH FINANCE MINISTER, FRANCOIS BAROIN, SAYING: "The priority is to first get underway the economic plans that most European countries have committed to, to reach the objective of reducing the deficits, then to discuss the issuing of debt at a euro zone level, in other words to collectivise the debt. That is a discussion that will need to be held eventually but that cannot be the first priority. The first priority is the application of the national plans." But for France at least, planning ahead is looking tough. Ministers have slashed their growth forecasts for the next two years, and jobless figures are now at their highest level for more than decade. Ruairidh Villar, Reuters.

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What China thinks of the euro

Friday, August 26, 2011 - 01:33