Chinese, Germans aim for 200 bln euros in trade
BERLIN (Reuters) – Chinese Premier Wen Jiabao and Germany’s Chancellor Angela Merkel aim to boost trade between the world’s two biggest export nations to at least 200 billion euros ($283.8 billion) in the next five years, they said at a meeting in Berlin yesterday. Wen also took the opportunity to express his confidence in the eurozone, saying the debt crisis of some member countries such as Greece was only of a “temporary nature.” About a quarter of China’s record foreign currency reserves of more than $3 trillion are estimated to be held in euros and China has reiterated its confidence in the euro since the debt crisis began, as well as pledging to buy eurozone debt. German officials expected Wen and Merkel to talk about the euro and the G8 agenda for global currency reforms, which is seen as a path toward boosting the Chinese yuan’s profile on foreign exchange markets. China’s intentions for its euro holdings and investments in the sovereign debt of eurozone countries has been the subject of much speculation in Wen’s visit to Europe. “It’s true that right now some European Union countries are encountering economic problems. These are, however, of a temporary nature,” Wen told the first ever full ministerial consultations between China and Germany. The Chinese premier said the EU was “fully in a position to overcome the present challenges.” European Central Bank policymaker Juergen Stark cautioned on Monday that he did not see China as a “rescuer” of the euro, nor did he believe the currency needed to be rescued. deficits have become a source of worry as the country tries to get its public finances in order. Zapatero also announced new measures to help Spaniards struggling to make mortgage payments in an economy with a eurozone-high unemployment rate of 21.3 percent. He gave no details but said these would not hurt banks holding the mortgages. Zapatero made no mention of calling early elections as the opposition is pushing him to. His term ends in March 2012. Mervyn King told the House of Commons Treasury Committee that simply injecting cash into economies to buy time would be insufficient if governments failed to use that time to make the necessary reforms. “Buying time is not sufficient. That time has to be used,” King said. His comments came a day before the Greek Parliament begins voting on austerity measures that have to be passed before the European Union and the International Monetary Fund will release the next installment of Greece’s 110 billion ($156 billion) bailout loan. Without the 12-billion-euro installment, Greece faces the prospect next month of becoming the first eurozone country to default on its debts, which could drag down Euro- pean banks and affect other financially troubled European countries. King said that, in the end, countries will have to run trade surpluses to pay off their massive debts.