Oct. 27 (Bloomberg) -- French President Nicolas Sarkozy said he plans to call Chinese President Hu Jintao today to discuss China contributing to Europe's efforts to resolve the region's debt crisis.
The European Financial Stability Facility will be worth $1.4 trillion after European leaders agreed to leverage existing guarantees by as much as five times, Sarkozy estimated when speaking to reporters at a briefing in Brussels at 4 a.m. local time after the end of a summit of European leaders. Chinese support for the effort would be welcomed, Sarkozy said. The presidents will speak about noon Brussels time, he said.
Chinese Premier Wen Jiabao has signaled willingness to aid the European Union as financial turmoil within the region threatens to crush export demand in China's biggest market. The expansion of the rescue fund and a deal for bondholders to take 50 percent losses on Greek debt may help Sarkozy and German Chancellor Angela Merkel to convince the world that Europe is getting to grips with the crisis.
"China will need time to evaluate this plan very carefully," said Shen Jianguang, a Hong Kong-based economist for Mizuho Securities Asia Ltd. "What worries China is that there is so much disagreement among European policy makers. It doesn't want to be seen spending money on a plan that even Europeans don't want to support."
Sarkozy and Hu's conversation comes a day before a planned visit to Beijing by Klaus Regling, chief executive officer of the EFSF, to court investors. China has the world's largest foreign currency reserves at more than $3.2 trillion.
The EFSF, established last year to sell bonds to finance loans for distressed euro nations, has since also gained the authority to buy sovereign bonds on the secondary and primary markets, offer credit lines to governments and recapitalize banks as the Greece-triggered debt troubles have spread. The EFSF said Regling's visit to China this week is linked to the fund's original debt-issuance role.
"It is a normal round of discussion with important buyers of EFSF bonds," Christof Roche, spokesman for the Luxembourg- based facility, said by e-mail yesterday. He declined to comment further when contacted by Bloomberg News by telephone. Agence France-Presse reported that Regling will travel on to Tokyo, citing a European Union official in Asia.
China may be willing to respond to a European request to help them fund a package to solve the euro region's debt crisis, AFP said, citing unidentified government officials familiar with the situation.
A press official at the People's Bank of China said he wasn't aware of the issue and asked for faxed questions, which weren't immediately answered. The Ministry of Foreign Affairs and the State Administration of Foreign Exchange, which manages China's foreign-exchange reserves, didn't immediately respond to faxed questions.
Calls to the press office of China Investment Corp., the nation's $300 billion sovereign wealth fund, weren't immediately answered.
Europe is facing international calls to end a debt crisis that President Barack Obama has said "is scaring the world" and U.S. Treasury Secretary Timothy F. Geithner has described as a "catastrophic risk." With a Group of 20 meeting looming on Nov. 3-4, euro-area government heads gathered in Brussels yesterday for the 14th time to tackle troubles that began in Greece two years ago, then engulfed Ireland and Portugal and now threaten Spain and Italy.
Premier Wen said last month that while China was willing to help, that developed nations also needed to put "their own houses in order."
In Canberra today, Australian Treasurer Wayne Swan echoed that sentiment. "We think it's appropriate that the international community look at what resources the International Monetary Fund has available to it," Swan told reporters. "But in the first instance, any bailout fund in Europe is a responsibility of the Europeans."
Bank of Korea Governor Kim Choong Soo said today the nation hasn't been approached to and hasn't considered joining the effort. Indonesian Vice Finance Minister Mahendra Siregar said the nation hasn't been asked to aid in Europe's effort.
The question of leveraging the AAA rated EFSF has arisen because of the political hurdles in countries such as Germany, the biggest European economy, to increasing the national guarantees that back the fund.
As part of its original role, the EFSF is providing 17.7 billion euros under Ireland's aid package of 67.5 billion euros and 26 billion euros under Portugal's rescue of 78 billion euros. So far, the EFSF has sold two five-year bonds and one 10-year security, all in the first half of this year. The Japanese government bought more than a fifth of the inaugural issue in January.
On Oct. 13, the EFSF announced changes to its bond-sale program for the two countries in the second half of 2011. Instead of selling four "benchmark" bonds in the period, as outlined in mid-May, the fund will sell one security for Ireland valued at 3 billion euros and delay issues planned for Portugal until "early 2012."
The EFSF may have to finance more than 70 billion euros of a planned second aid package for Greece. The initial Greek rescue of 110 billion euros in May 2010 was composed of loans directly from euro-area governments and the IMF.
by Jonathan Stearns and Helene Fouquet Bloomberg News Oct 27, 2011
Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2011/10/26/bloomberg_articlesLTPGNJ0YHQ0X.DTL#ixzz1bzpDPC4m
Sarkozy Turns to Hu for China Aid as Europe Expands Rescue Fund
Reuters: Business News
National Commercial Real Estate News From CoStar Group
Latest stock market news from Wall Street - CNNMoney.com
- ► 2016 (145)
- ► 2015 (146)
- ► 2014 (102)
- ► 2013 (395)
- ► 2012 (392)
- Reagor: Revised program targets underwater homeown...
- Economists warn housing prices will lose more grou...
- Pending home sales fell 4.6% in Sept.
- Scottsdale condo prices up nearly 5% as foreclosur...
- $1.6 billion Prasada project stays on track in Sur...
- Judge approves Chapter 11 for Realty Executives
- Economy picked up over summer
- Scottsdale approves 2nd plan for apartments near a...
- New-home sales up 5.7%, builders slash prices
- Sarkozy Turns to Hu for China Aid as Europe Expand...
- Greece to get 100 bil euros in more rescue loans
- Home prices up in half of major US cities
- Banks score higher in satisfaction survey
- Ad blasts Romney housing comment
- Arizona underwater homeowners to get refinance hel...
- Phoenix homes, part of segregated past, demolished...
- Debt crisis plan is not yet ready
- Massive West Valley development to launch
- Europe's big banks under pressure in crisis
- Developer lays out ideas for dude ranch in Scottsd...
- Combs: Seller isn't absolved in 'as is' sale
- Realtors decry potential loss of mortgage deductio...
- Wall Street Has Worst Quarter Since Crisis in Bank...
- Arizona unemployment rate down in September
- Scottsdale council OKs first plan for apartments n...
- Scottsdale Waterfront rides wave in low tide
- Citigroup to pay $285 mil to settle SEC fraud char...
- Chase's CEO backs a bright outlook
- Origination News - NAR: Lower GSE Loan Limits Alre...
- Perspective: Problem with Housing 2011
- Office-space rent prices decline in Valley
- The new normal: Higher bank fees are here to stay
- Think before switching banks
- Fed: Crisis alters central-bank focus
- Middle-class homeownership dream may be slipping a...
- World population nearing 7 billion
- Mortgage fraud plea involves 40-plus homes
- TDI proposes 667 apartment units for One Scottsdal...
- Phoenix seeks to cancel $97.4 million pact with Ci...
- Myths, misperceptions about credit scores rampant
- EU exec, France want voluntary bank deal on Greece...
- Report: Fewer foreclosures slowed Sept. resales in...
- Fed minutes: 2 policy makers saw need for bolder s...
- Scottsdale Airport Commission rejects apartment pr...
- FDIC backs ban on banks trading for own profit
- Interest in Scottsdale McDowell Corridor redevelop...
- Census numbers detail Arizona's housing bust
- China investment arm buys bank shares to support m...
- Scottsdale entrepreneur thinks inside the box
- European Central Bank offers banks new emergency l...
- Germany, France devise bank plan
- Moody's sees Volcker rule as credit negative for b...
- Windows of time
- Scottsdale-area home prices edge up in 3 areas
- Phoenix-area home prices remain too cheap
- Phoenix-area real estate collapse echoed troubles
- Phoenix-area home price changes vary greatly
- Realty group opens office in Scottsdale
- Gold drops 1 percent after Italy, Spain downgraded...
- Work to start on renovating retail center
- Rush is on to build 3,500 apartments in Scottsdale...
- Mixed-use project coming to Arcadia
- Interest in Scottsdale McDowell Corridor redevelop...
- Maricopa County tops list for home vacancies
- Census: Housing bust worst since Depression
- Phoenix-area bankruptcy filings continue to drop, ...
- Recent data on housing show things looking up
- CBRE Investors pays $53.5 mil for operations hub
- Proposal to shape access to Sonoran Desert
- Sales up 20% at Scottsdale's Windgate Ranch
- Home prices up for 4th month
- Seattle investors buy W. Phoenix apartments
- Ex-leaders of Radical Bunny face SEC grilling
- Arizona trying new ways to assist homeowners
- Moving to downtown Phoenix has saved couple lots o...
- Reagor: Few details on plan for refinancing
- Rental housing becoming less affordable
- Fulton Homes to open 3 new subdivisions | Central ...
- Cross collateralization can trip up borrowers
- IMF vows to tackle Europe debt troubles
- Scottsdale Airpark multifamily housing plans advan...
- Developer leaves Glendale, Scottsdale picking up p...
- Fed plan, fear push 10-year yield to record low, b...
- Seized lands to be placed on auction block
- IMF downgrades its outlook for U.S., Europe
- Agency encourages short sales by offering money
- Doubting value of owning a home
- ▼ October (87)