Desperate EU chiefs ask China to fund huge bailout!
Further embarrassment as one trillion euro bailout fund announced yesterday does not really exist.
BRUSSELS, Belgium - October 28, 2011 - Europe is holding out the begging bowl to China in an effort to keep the rescue package for the single currency alive.
In a clear sign of how the balance of world power has tipped towards the East, EU leaders hope China can be persuaded to hand over huge sums to help bailout the eurozone.
In a further embarrassment, it emerged that the one trillion euro bailout fund announced in the early hours of yesterday does not really exist.
The pot contains only a quarter of that amount, and the rest of the money likely to be “leveraged” - using the existing 250 billon euros as security to borrow the rest.
Markets initially reacted with relief after all night talks on the debt crisis engulfing the eurozone ended with agreement on a three-part package of measures after weeks of bickering.
EU leaders said they would boost an existing euro bailout fund to at a trillion euros, recapitalize dangerously exposed European banks, and write off half of Greece’s towering debts.
But in the cold light of day, it became clear that there were almost no details on how the bailout mechanism, supposed to act as a guarantor for debt-stricken countries in danger of defaulting on what they owe, might operate.
Eurozone leaders said they hoped to “leverage up” the cash left in the fund, already called upon by Greece, which totals around 227.7 million euros. Germany, other rich eurozone nations, and the European Central Bank refused to put more money into the pot.
Humiliatingly, it emerged that French president Nicolas Sarkozy had telephoned the Chinese leader Hu Jintao yesterday to ask for investment and backing in the European fund.
But Chinese officials said they resented being seen as “just a source of dumb money”, and chillingly suggested they would insist that criticism of their economic policy is silenced in exchange for offering assistance.
