China
welcomed European Union's agreement on the 109 billion euro bailout plan for
Greece and has been confident of the stability of the euro zone and other
member countries in the past, present or future, said Zhou Xiaochuan, governor
of People's Bank of China on July 23 during an interview with Financial Times.
Bailout plan
helps bring financial stability
After eight
hours of negotiation, euro zone leaders agreed on July 21 local time in the
Belgium capital Brussels on a new 109 billion euro bailout for Greece, with
private bondholders contributing 37 billion euro.
Zhou said
China welcomed the agreement by the euro zone and European Union leaders on the
second-round bailout plan for Greece and a crisis management mechanism for the
euro zone on July 21 to ensure debt remains sustainable in the euro zone and
prevent the debt crisis from further expanding.
Such moves
can help solve the sovereign debt problem, maintain financial stability in the
euro zone and other member countries, safeguard market confidence as well as
enhance the strong, sustainable and balanced growth for the European Union and
global economic recovery as a whole, he said.
Zhou
expresses support for European financial market
In
addition, Zhou also lent great support to the European financial market. He
made it clear that China, as a responsible investor in the international
financial market, has always had confidence in the euro zone and euro. Whether
in the past, present or future, the European financial market has always been
one of China's main investment markets.
According
to market analysis, euro capital accounts for some 20 percent of China's
foreign exchange reserves.
Li-Gang
Liu, head of Greater China Economics under the ANZ Banking Group, said that the
E.U. bailout package put Greece in technical default. Euro zone leading
countries, such as France and Germany, also reached agreement on this kind of
"extraordinary" method to solve the debt crisis in Greece. It is a
major victory for Greece and shows that the euro zone chose to avoid a possible
system crisis with a swift solution, but it carries risk.
Liu said
that there would be more severe risk factors for the euro zone if the debt
crisis in Greece continues to spread and worsen.
By Zhang
Xinyi, People's Daily Online
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