Has the EU Escaped a Chinese Rescue?

From the EuoropeanVoice.com:

It looks like Greece will be all right. After years of denial and budget blow-outs that left the country’s public finance in a dire mess, it was announced after the summit of EU leaders on 11 February that – in one way or another – the eurozone will support Greece in getting its economy back on track… Europeans asking each other for help and getting it (albeit in undefined terms) looks like good news for the European Union. But there is one worrying element to this Greek tragedy that people seem to have forgotten: Greece went to China first.

In late January, Greece, through the good services of Goldman Sachs, offered China €25 billion of its public bonds.

We know we are living through a power shift from West to East. We also know that Europe has difficulty coping with pressing global issues. But this opening by Greece to China highlights a few more disturbing trends for Europe…But if China accepted the Greek offer, what leverage would China gain over Europe? China’s investment funds cannot be seen to be so willing to pour money into failing public budgets unless there is a very good reason to do so. True, China has lent huge amounts of money to Russia, Brazil and western African nations. But these were trade-offs for equally huge natural resource deals. Unless we count the craftiness of Ulysses’ scions as a natural resource, Greece does not have much to barter with.


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