Europe crisis tops agenda as China, EU leaders meet

China: Chinese and EU leaders were scheduled to meet yesterday for a major summit set to be dominated by Europe’s debt crisis, as an increasingly worried Beijing considers coming to the rescue of the embattled continent.

The summit comes a day after ratings agency Moody’s downgraded Italy, Spain and Portugal and warned that France, Britain and Austria were increasingly vulnerable to the crisis, which China said had reached a “critical” stage.

Beijing has made clear its growing concerns over the crisis in Europe, its biggest export market, repeatedly urging EU leaders to get a grip on the situation.

On Tuesday, Premier Wen Jiabao will hold talks with EU president Herman Van Rompuy and European Commission president Jose Manuel Barroso likely to touch on Syria, Iran and a controversial EU carbon charge on airlines.

But concerns over Europe’s economy and financial sector are expected to dominate.

European leaders have already asked China, which holds the world’s largest foreign exchange reserves, to invest in a bailout fund to rescue debt-stricken states.

Beijing has so far made no firm commitment, but Wen said this month it was considering offering help through the International Monetary Fund or bailout funds, and there is speculation China will make its position clearer at the summit. “Helping stability in the European market is actually helping ourselves... We have to keep import and export policies stable,” the Chinese premier said after talks with the visiting German Chancellor Angela Merkel.

The IMF warned last week that an escalation of the crisis could slash China’s economic growth in half this year, and foreign ministry spokesman Liu Weimin said Monday the debt issue was “at a critical juncture”.

AFP