Wen Says China Ready to Be More ‘Deeply’ Involved in Solution for Europe

Feb 15 (Bloomberg) - China is willing to get “more deeply” involved in resolving Europe’s debt crisis, and the continent must send a clearer message to show how it’s working to strengthen its finances, Premier Wen Jiabao said.

“China’s willingness to support Europe to cope with sovereign debt problems is sincere and firm,” Wen said at a joint press conference yesterday in Beijing with European Union President Herman Van Rompuy. “China is ready to get more deeply involved in participating in solving the European debt issue.”

Van Rompuy said he welcomed the interest China has shown in investing in European sovereign bonds and the European Financial Stability Facility. Wen reiterated remarks he made Feb. 2 that China was considering measures to help stabilize the European monetary union through the EFSF and European Stability Mechanism.

Wen’s comments come after Greece’s parliament passed austerity measures needed to receive a second aid package. China, which has been wooed by European leaders to help fund the temporary EFSF and its permanent successor, the ESM, is pushing for Europe to undertake further structural reforms.

“We expect those highly indebted countries to strengthen fiscal consolidation, cut deficits and reduce debt risks in light of their national conditions,” Wen said. “We hope the EU will soon reach internal consensus, make the political decision and send to the international community a clearer and a stronger message of policy responses.”

Greek Aid
China has previously said that it needs more detail on any plan to contribute funds to the euro area.

Euro-area finance ministers meet today to discuss the second Greek aid package. Moody’s Investors Service cut the debt ratings of six European countries on Feb. 13, including Italy, Spain and Portugal, and said it may strip France and the U.K. of their top Aaa ratings, citing Europe’s debt crisis.

Spain was downgraded to A3 from A1 on Feb. 13, Italy to A3 from A2 and Portugal to Ba3 from Ba2, all with negative outlooks. Slovakia, Slovenia and Malta also had their ratings lowered.