China hopes EU will stick to bailout plan

Source: Channel News Asia, 02 November 2011

China said on Wednesday it hopes Europe will stick to a bailout plan reached at last week's debt crisis summit, after Greece called a surprise national referendum on the deal. World markets have plunged after the shock announcement that Athens will hold a vote on the package of measures agreed last week to try to rescue the eurozone from a worsening debt crisis.

China, the world's second-largest economy and a major holder of European debt, has repeatedly called on EU leaders to put their financial houses in order. China's $3.2 trillion dollars in foreign exchange reserves have put it in a position of strength, but it also faces huge domestic challenges. They include stubbornly high inflation, an economy that is excessively dependent on exports, and 150 million people – almost half the eurozone population – still living in poverty.Greek premier George Papandreou's announcement of a confidence vote and then a referendum on the debt deal wrongfooted EU leaders who had laboured to put the rescue package together last week.