http://www.zerohedge.com/contributed/ironic-eu-begging-expedition-china
Submitted by testosteronepit on 02/16/2012 23:48 -0500
Ironic EU Begging Expedition to China
Wolf Richter www.testosteronepit.com
Europe returned from its begging expedition to Beijing empty-handed. Well, they called it a summit, but it was an unmitigated begging expedition, one more in a series. Jose Manuel Barroso, President of the EU Commission, and Herman Van Rompuy, President of EU Council, were talking to Premier Wen Jiabao, trying to lure China into plowing part of its hard-earned foreign exchange trillions into the European bailout fund, the EFSF. And they made that dreadfully convoluted and opaque creature smell like a rose, expounding with habitual European finesse and nuance on its guarantees and loss mitigation provisions supported by countries like Italy and Spain that can barely keep their nose above water.
Even a small amount would have been something. Anything really. Just so that they wouldn’t have to fly home empty-handed. And once they got their foot in the door, surely, there’d be ways and means to get the other foot in as well. But rather than kick the conniving beggars out, Wen smiled and declared soothingly, as always, that Europe was an important partner, and that China and the EU would work together to solve the debt crisis.
But where's the money? It appears that buying sovereign bonds of debt-sinner countries that are veering towards insolvency and need of an ever larger flow of cheap money to pay off old investors and teetering banks just isn't a lot of fun.
China has its own problems on the horizon—and some, like a popping real estate bubble, on its doorstep. No one knows where this will end up, but real estate won't experience a soft landing, nor will the construction business. Foreign direct investment is down, well just a smidgen, but the Ministry of Commerce warned that the outlook for FDI was outright "grim." And then it turned out that China reduced its holdings of US Treasuries, down to $1.1 trillion, the lowest since June 2010.
The Chinese people, some of whom had bought apartments that dropped 30% in value since, aren’t particularly eager to help a distant continent, though, judging from the masses of Chinese tourists in Europe, they're doing quite a bit to help out. Just not for free. Perhaps they remember the past when the West lectured China on a laundry list of issues, from capitalism to human rights and democracy, and when French President Nicolas Sarkozy got into a pissing match with China just before the Beijing Olympics. Anti-Chinese sentiment ran high in France at the time. But that was 2008. Now, the Eurozone is steeped in a debt crisis, and even France’s most coddled industry—fine wines—got slapped in the face. By China. Read.... Merde! Chinese Wines Did What to French Wines?
Barroso and Van Rompuy assured the world that they’d talked to Wen about other issues as well, the usual crowd pleasers: better market access for European companies and better protection of intellectual property. Even Syria came up. They’re trying to do what US Presidents and Secretaries of the Treasury have done for years: regular begging expeditions to Beijing dressed up in diplomatic discussions. But China is less interested in crappy sovereign bonds than in productive assets that offer strategic advantages, certain technologies, and access to markets. It’s a government policy. State-owned enterprises, the sovereign wealth fund CIC, and some private companies are actively pursuing it.
Meanwhile, the ever-worsening Eurozone debt crisis has frayed a lot of nerves, particularly among Greek politicians, whose country is on the verge of bankruptcy, and among German politicians, who no longer trust Greek politicians. But now, a far bigger confrontation at the very core of the Eurozone is shaping up, one that may turn into a debacle with epic consequences.... François Hollande v. the German Dictate.
and...
http://www.france24.com/en/20120216-us-says-no-plans-give-imf-more-money
US says no plans to give IMF more money
The US Treasury reiterated that Washington has no plans to provide more money to the International Monetary Fund as the eurozone crisis drives the Fund to raise more emergency resources.
AFP - The US Treasury reiterated Thursday that Washington has no plans to provide more money to the International Monetary Fund as the eurozone crisis drives the Fund to raise more emergency resources.
Treasury undersecretary for international affairs Lael Brainard told a congressional hearing that the US economy could be damaged by a further deterioration of conditions in Europe.
But with the IMF seeking to boost the funds it has for intervention and support against eurozone crisis contagion by some $500 billion, Brainard said the US was not planning on chipping in.
"We believe that the IMF has adequate resources, and we don't see any need for the US to provide additional resources to the IMF at this time," she told the Senate Banking Committee.
"The euro area is currently confronting difficult challenges of fiscal sustainability, or liquidity, and of structural imbalances," she said.
"We believe Europe has the will and the capacity to manage these challenges effectively."
The IMF said in January it was seeking to increase its lending capacity by up to $500 billion to confront the debt crisis in Europe.
Fund Managing Director Christine Lagarde and her top staff have been polling G20 leaders around the world to see if they will contribute to the new funding.
Only the euro area so far has committed to contributing, while Washington has stood out in refusing to take part.
Treasury undersecretary for international affairs Lael Brainard told a congressional hearing that the US economy could be damaged by a further deterioration of conditions in Europe.
But with the IMF seeking to boost the funds it has for intervention and support against eurozone crisis contagion by some $500 billion, Brainard said the US was not planning on chipping in.
"We believe that the IMF has adequate resources, and we don't see any need for the US to provide additional resources to the IMF at this time," she told the Senate Banking Committee.
"The euro area is currently confronting difficult challenges of fiscal sustainability, or liquidity, and of structural imbalances," she said.
"We believe Europe has the will and the capacity to manage these challenges effectively."
The IMF said in January it was seeking to increase its lending capacity by up to $500 billion to confront the debt crisis in Europe.
Fund Managing Director Christine Lagarde and her top staff have been polling G20 leaders around the world to see if they will contribute to the new funding.
Only the euro area so far has committed to contributing, while Washington has stood out in refusing to take part.
"We have welcomed the IMF's role in helping to contain the crisis and its impact on the US recovery and global economy," Brainard said.
"However, while the IMF should continue to play a constructive role in Europe, IMF resources cannot substitute for a strong and credible European firewall and response.
"The challenge Europe faces is within the capacity of the Europeans to manage and the (US) administration has been clear with our international partners that we are not seeking addition funding for the IMF," she added.
"However, while the IMF should continue to play a constructive role in Europe, IMF resources cannot substitute for a strong and credible European firewall and response.
"The challenge Europe faces is within the capacity of the Europeans to manage and the (US) administration has been clear with our international partners that we are not seeking addition funding for the IMF," she added.
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