What's new

Sarkozy to Seek China Aid as EU Expands Rescue Fund

Relax, the EU 'breakup' was tongue-in-cheek, although it will certainly be much weaker. As for scientists, much of the Eurofighter technology is spread around and the pickings are aways easier when the economy hits the skids. When the USSR collapsed, the Republic of Russia was still doing fine, but it was still possible to pick off their scientists.

Tongue in cheek or head in ***, doesn't change the reality technology isn't going anywhere.

What are you smoking? France barely avoided the downgrade.

For now.

That best you an think of? What I am smoking. Shouldn't have expected any better.

And a downgrade would cause them to sell of their millitary technology, just like US sold off it's technology after the downgrade right? I can see you are a real thinker now.

How "incredible" that France asked China, and not India, for help ;)

India is not sitting on a pile of useless money, or did you not know that too?

When disposable incomes fall, the demand for cheaper goods increases. (And the demand for luxury goods falls).

This is one factor as to why China continued to grow at near double-digits during the Credit Crunch.

Really. Please tell that to your trade ministry ASAP. They are a worried bunch.

BEIJING—China’s Commerce Ministry said Tuesday it is worried that Europe’s debt crisis could spark trade friction and hurt sales to the country’s largest export market.
The comments from ministry spokesman Shen Danyang come as debt-laden European countries fight Beijing over trade barriers, and as the US prepares a retaliatory trade measure against China.
China worried Europe debt crisis will hit trade | Inquirer Business

Incredible indeed. :lol:

With our supposedly "fake growth" and our "fake reserves" (how do you fake reserves)?

They should have gone to the #1 emerging superpower India instead.

So there are talks of the reserves being manipulated too. Never know the reliability of whatever comes out of CPC.

Nice backslapping a bunch of fanboys have going on here.
 
Maybe China can implement an Open Door Policy on the E.U. It will be good for China's economy.

---------- Post added at 12:21 AM ---------- Previous post was at 12:19 AM ----------

China could sell opium in UK and control Isle of Man as a colony.
 
Tongue in cheek or head in ***, doesn't change the reality technology isn't going anywhere.



That best you an think of? What I am smoking. Shouldn't have expected any better.

You didn't even know about France's downgrade, stating that these economies are fine. Now that you are caught with your pants down, you are upset.

And a downgrade would cause them to sell of their millitary technology, just like US sold off it's technology after the downgrade right? I can see you are a real thinker now.

The discussion is not about what is happening now, but where things may be headed. Read what happened to Russian scientists when the economy turned sour. Nobody's auctioning off technologies; it's all about leverage and opportunities that arise with economic turmoil.

India is not sitting on a pile of useless money, or did you not know that too?

Except that this money seems extremely useful in how it can help advance Chinese interests.

That is, after all, the topic of this thread. Or hadn't you noticed in your knee-jerk hatred of China?
 
You didn't even know about France's downgrade, stating that these economies are fine. Now that you are caught with your pants down, you are upset.

I didn't know that? You presume too much.

A quick test for your 'knowledge of French economy', why is it that France is endangered and not Germany or any other EU big-wig? (Hint: Its nothing to do with economy)

The discussion is not about what is happening now, but where things may be headed. Read what happened to Russian scientists when the economy turned sour. Nobody's auctioning off technologies; it's all about leverage and opportunities that arise with economic turmoil.

And I told you those technology holders are nowhere close to what happened to Russia. You intentionally thick?


Except that this money seems extremely useful in how it can help advance Chinese interests.

That is, after all, the topic of this thread. Or hadn't you noticed in your knee-jerk hatred of China?

Extremely useful.... Then why are the Chinese not rushing to buy off all Eurobonds if its so useful for them.

By the way since you mentioned topic of the thread it was your statement that reply was to (amnesia?), I also didn't notice mention of India, which you brought in in your 'knee-jerk' hatred of India shall I say?
 
I didn't know that? You presume too much.

I go by your statements written down. If you get caught, don't complain.

A quick test for your 'knowledge of French economy', why is it that France is endangered and not Germany or any other EU big-wig? (Hint: Its nothing to do with economy)

The primary factor is economic and the fact that French banks are more vulnerable to Greek (and other troubled) debts combined wiht French workplace laws

Factors of French demographics and cultural affinity to the south rather than northern Europe are furphies thrown out by some people to distract from the main factors.

And I told you those technology holders are nowhere close to what happened to Russia. You intentionally thick?

Wrong. You said these economies were 'just fine'. They are not.

No comparison to Russia.

Extremely useful.... Then why are the Chinese not rushing to buy off all Eurobonds if its so useful for them.

Did you even read the thread? Chinese want something tangible instead of worthless paper.

Why would they buy off useless debt, much of which will be written off anyway, making the paper worthless?

Maybe your incredible economist mind missed that part.

By the way since you mentioned topic of the thread it was your statement that reply was to (amnesia?), I also didn't notice mention of India, which you brought in in your 'knee-jerk' hatred of India shall I say?

I mentioned India only when you (an Indian) brought in Pakistan and Somalia.

Incredible amnesia on your part.
 
OK - lets move on -- below is a piece arguing in favor of a bail out and a lot of other things as wel - what do you make of it:


October 27, 2011
Why China Should Bail Out Europe
By ARVIND SUBRAMANIAN

Washington

EUROPE is drowning and needs a lifeline. A series of marathon meetings this week yielded a new set of proposals, but what they depend on is cash — and lots of it, perhaps trillions of dollars — to save Greece and the European banking system and to prevent financial contagion from spreading to Spain, Italy and even France, which would destroy the euro zone as we know it. Where to turn for help? The answer is obvious: China.

Indeed, the call by President Nicolas Sarkozy of France this week to President Hu Jintao of China, seeking support for the European Financial Stability Facility, could represent a major change in the global landscape: the consolidation of China’s economic dominance at the expense of the status quo powers — the United States and Europe.

Despite the agreement among Europe’s leaders on Thursday to recapitalize banks on the Continent, the reality is that Europe cannot muster this cash on its own. In part, this is because most countries are fiscally stretched and even Germany, with a debt-to-gross domestic product ratio above 80 percent, is reaching the limits of its check-writing ability. But it is also because Germany seems reluctant to transfer resources, either directly through fiscal means or indirectly through the European Central Bank.

And with a United States essentially sidelined because of its own economic and fiscal weakness, it is even less of a surprise that the S O S is going out to China. Only China, with its $3 trillion in reserves, is now able to provide the magnitudes of relief that Europe desperately needs.

What should China do? So far, it has opted not to be an active financier of the European countries threatened by crisis. But that is increasingly becoming a less tenable position. China is the world’s major exporter, and averting economic collapse in the indebted importing countries of Europe will be very much in China’s interest.

But China has a choice. It can help Europe bilaterally by back-stopping the stability facility, as Europe has requested, or by guaranteeing to buy Italian and Spanish bonds at a rate that would keep these countries’ finances sustainable (much as the European Central Bank ought to be doing). Or it can help by providing the International Monetary Fund with additional money to, in turn, lend to Europe.

From China’s perspective, the possible advantage would be to exert power to obtain direct and concrete benefits. For example, it could ask for market economy status in Europe, which would reduce the scope for protectionist action against Chinese goods entering the European market. It could also seek to buy companies in distressed countries on advantageous terms.

The risks in this bilateral approach are considerable. It would expose China to the charge of becoming enmeshed in European politics. Domestically, it would expose the government to the charge of privileging foreign investment at the expense of investing in what is still a poor country with great development needs and challenges.

Helping Europe by strengthening the I.M.F. and increasing its lending would avoid some of these political costs, especially since China would not be directly involved in European politics and problems. But China would have to receive something considerable in return for the extra resources that it would be providing.

China should demand nothing less than a wholesale revamping of the governance of the I.M.F. to reflect the current economic realities. Governance reform can no longer be just about the nationality of the I.M.F.’s managing director but should fundamentally be about who will have the greatest voice and exercise the most power in the new world.

Today, the United States and Europe each have effective veto power in the I.M.F. because important decisions require an 85 percent share of the vote. If China were to become the I.M.F.’s major financier it should have veto power on terms equivalent to those of the United States. Europe’s power should be reduced commensurate with its transition from creditor to potential borrower status. Supplicants, China should insist, cannot have veto power in a financial institution.

The Chinese government could then trumpet a nationalist achievement — equal status as the United States, and a greater status than that of Europe, in running the world’s premier financial institution — as the return for investing its cash abroad.

These demands would be legitimate and indeed be welcome for the world because they would tether China more firmly to, and create a stake for it in, the multilateral system.
Those in the United States and Europe who would resist these changes should remember that the alternatives are worse. A China that uses its might bilaterally to gain narrow political advantages would be a worrying portent for the future when China becomes economically bigger and stronger. And a China that refuses to take the phone call at all could well push Europe off the cliff. Europeans are running out of options; debtors cannot be choosers.


Arvind Subramanian, a senior fellow at the Peterson Institute for International Economics, is the author of “Eclipse: Living in the Shadow of China’s Economic Dominance.”
 
and this is what the bbc writer has to say:

BBC News - What would Chinese cash for eurozone bailout fund mean?
Chinese investment directly into the real economy in Europe could well have a much greater effect.

Whether European voters would welcome Chinese buyers of real estate, companies and roads at a time when prices are depressed by the ongoing crisis is another matter.

But compared with the non-tangible rewards China is likely to demand in return for formal financial support - such as an early European Union recognition as a market economy, greater voting rights within the International Monetary Fund, a lifting of a ban on European arms sales to China, or silence around the matter of China's supposed efforts to keep its currency artificially weak - that may be a small price to pay.

Lets see how China wants them to repay.
 
Here's my take:

Dr. Subramanian is selling snake oil! Consider:

China should demand nothing less than a wholesale revamping of the governance of the I.M.F. to reflect the current economic realities. Governance reform can no longer be just about the nationality of the I.M.F.’s managing director but should fundamentally be about who will have the greatest voice and exercise the most power in the new world.

Today, the United States and Europe each have effective veto power in the I.M.F. because important decisions require an 85 percent share of the vote. If China were to become the I.M.F.’s major financier it should have veto power on terms equivalent to those of the United States. Europe’s power should be reduced commensurate with its transition from creditor to potential borrower status. Supplicants, China should insist, cannot have veto power in a financial institution.

The Chinese government could then trumpet a nationalist achievement — equal status as the United States, a greater status than that of Europe, in running the world’s premier financial institution — as the return for investing its cash abroad.


So, for throwing a life line to the Europeans and the Americans - the Chinese get to recognized as "good boys" -- as "Equals" of debtors?????? Where the money in that?? What's the benefit in that?? In fact it's like offering to have the Chinese be driven around in Rolls Royce while the Eu literally picks their pockets and treats them as if they were equals -

Do Chinese have some kind of inferiority complex that that they need to be treated equally with Europeans and US - there's no money in this "equal" stuff - it's for people with insecurities not for people with a lot of money.
 
isnt it beautiful that india still being a debtor country are so jealous that china is now front and center in the global economy.
i can imagine in india right now, effigies are being burnt of manmohan singh demanding why india is not bailing out europe while china is taking the lead.

this is why china is so far ahead of india in global affairs and in importance that its not even worth comparing china to india.
india is not even in china's league.

if the chinese leaders dont get major and i mean major concessions, chinese people should demand answers from the chinese leaders as to why not.

creditors are the rule makers.
debtors are the rule takers.

china should set the rules.
 
rh5N3.jpg


Why are the PIIGS begging from China and not the so called more capable,rich or soon to be super duper #1 economy might neighbours?
Anyway, a more free euro market would be great.Think of the implications it would have for China and for the arms embargo,i dont think we need it.China of today is not of the past,we're doing just great with our own arms program.:china:
 
OK - so it stinks - Why does it stink?



The men without qualities
By Chan Akya

To understand the current events in Europe and the handling of the eurozone debt crisis, it is best if one is familiar with the epic, unfinished novel The Man Without Qualities, by Robert Musil (1880-1942). Viewed either through the prism of a fictional existence of the protagonist mathematician Ulrich or as a metaphysical commentary on the protagonist's adaptation to a life without meaning, Qualities navigates the reader through multiple realities and arrives at an inconclusive ending; an end that seeks to be continued, as it were.

There was a period in history when the word "summit" actually meant something. For example when Winston Churchill, Franklin D Roosevelt and Joseph Stalin had a summit, the word was well-deserved because each of the men could throw or had thrown hundreds of thousands of citizens into war. Even when the opposite-end folks, ie Adolf Hitler and Benito Mussolini, met, it could be called a summit because here were two truly horrible men who had commanded millions to their deaths.

In contrast, the best way to describe today's crop of European politicians is "men without qualities", people who have neither l eadership nor administrative skills. The classic Don Martin figure (left) is more appropriate not so much as a caricature but the real thing masquerading as a comic figure. When this crop of politicians - Germany's Angela Merkel, France's Nicolas Sarkozy, Silvio Berlusconi of Italy et al - do agree to meet, it would be a mistake to term that a "summit". A more appropriate description would be "base camp"; think about it, these guys meet, and then start negotiations without having the ability to agree on anything because their governments back home simply never secured the mandates to do so.

Imagine when Stalin and Roosevelt met with Churchill, the Englishman simply listened to the proposals for D-Day and then promised to confirm British participation once he returned home.


Base camp materials
So what has this base camp run by men without qualities, managed to achieve? In my opinion, "precisely nothing" would be a polite description, while "dangerous prestidigitation" would be more accurate if a general mouthful.

By far the biggest problem is the one involving the European Financial Stability Fund (EFSF), where the promise had been to increase its size from 440 billion euros (US$606 billion) to over 1 trillion euros. This appears to have been achieved as per the headlines, but not so well once we go into the details.

The mechanics of the funding increase are to offer "credit enhancements" to the issue of Italian and Spanish debt going forward. In other words, if the EFSF is rated at say triple-A, a bond investor buying Italian government debt can shrug off the impact of any downgrade because there is a triple-A backup facility that would pay him par should Italy ever go bankrupt. So far so good.

But think this one through the prism of the Greek default - wherein the European Union base camp have decided that a) only private sector creditors lose money, and b) the debt forgiveness of 50% is to be voluntary.

The idea for the latter was to avoid a "trigger" event for credit default swaps (CDS) and therefore avoid all protection sellers (mainly European banks) from paying out on the notional value to protection buyers (mainly American hedge funds). This is how the term voluntary has been used, in effect, to destroy the value of legitimate trades done by various investors
.


So if you were an early buyer of Greek sovereign debt and decided say in 2008 that the country was heading in the wrong direction and therefore decided to buy CDS protection, you may have approached the last weekend thinking that your exposure is hedged, as the loss in the bonds would be offset by payments due on the CDS. Instead, you will now nurse a loss on the bonds, but without the corresponding offset gain in CDS. In other words, you have just been hosed, as your insurance is worthless.

That is precisely the same point where the idea of insurance or credit enhancement falls at the altar. Why should investors who just got burned on Greek bonds turn around and trust the same people who screwed them in terms of future credit enhancements on Spanish or Italian bonds? What is to stop a future European Union base camp from deciding on implementing a "voluntary" restructuring of Italian or Spanish bonds, and on the basis of which no payments would be forthcoming from the EFSF for losses suffered?

Hello, anyone home?

Then there is the counter-intuitive bank capitalization program. The idea is that to strengthen the European banking system, new capital would be required to the tune of 106 billion euros. Firstly no one with a clue actually believes that number - when the folks who do a stress test that comes up with the best bank in the region being Dexia, only for that bank to embrace a very quick tryst with destiny just a few weeks later, you have a serious problem with credibility. So when you say the "shortfall" is 106 billion euros, any reasonable person is going to assume 500 billion euros, give or take.

The follow-up question is - how are the losses on Greek sovereign debt now to be treated at the various banks? French banks got into trouble over the past few weeks because they had assumed a 21% loss on Greek bonds, but will now have to eat 50%. Many of them claimed to have "hedged" themselves through CDS - which is now worthless. So, what is the actual loss due to Greece, and how is it distributed across the various banks?


The mother of all questions though is one of where that money is to be raised, and more importantly how. There is loose talk in the base camp statement that private sector solutions must first be found, after which the states would intervene as necessary. Meanwhile, the banks would be encouraged not to cut their trading books or their loan books, in a panic attempt to reduce extraneous shocks of which there will be none - because the European base campers have said so.

RRRiiigggghhhhttttt.
 
I go by your statements written down. If you get caught, don't complain.

I didn't say it so you assume I don't know it right? Absolutely logical thinking.

And since you mentioned Economics somewhere, I just got reminded of "Fallacy of Assumption". Do try reading up on it.


The primary factor is economic and the fact that French banks are more vulnerable to Greek (and other troubled) debts combined wiht French workplace laws

Factors of French demographics and cultural affinity to the south rather than northern Europe are furphies thrown out by some people to distract from the main factors.

Workplace laws? And this after I did mention nothing to do with economy. You see, google can only tell you so much :lol:



Wrong. You said these economies were 'just fine'. They are not.

No comparison to Russia.

These economies are not fine? All you had to support was the french avoiding the downgrade and compared it to Russia losing talent after its meltdown. Forget already what you said....selective amnesia? Let me help youwith what you said....

The discussion is not about what is happening now, but where things may be headed. Read what happened to Russian scientists when the economy turned sour.
http://www.defence.pk/forums/china-...aid-eu-expands-rescue-fund-2.html#post2234676


Did you even read the thread? Chinese want something tangible instead of worthless paper.

Why would they buy off useless debt, much of which will be written off anyway, making the paper worthless?

Maybe your incredible economist mind missed that part.

And you are the Chinese advocate? Ahhh how can I forget, more chinese than the chinese etc...

Regarding why would they buy it, if you could read what I have been posting you could come across as less ignorant. I encourage you to read what Chinese officials themselves have to say about the matter,

BEIJING—China’s Commerce Ministry said Tuesday it is worried that Europe’s debt crisis could spark trade friction and hurt sales to the country’s largest export market.
The comments from ministry spokesman Shen Danyang come as debt-laden European countries fight Beijing over trade barriers, and as the US prepares a retaliatory trade measure against China.


I mentioned India only when you (an Indian) brought in Pakistan and Somalia.

Incredible amnesia on your part.

Ohh my bad then, I didn't realize you were commenting on the poster rather than the post.
Wonder where did I hear about that Knee-jerk hatred ....
 
Back
Top Bottom