The Chinese no doubt do have a plan to save the euro: buy Mercedes, Airbus, Rolls Royce, Fiat, Danone.
The 21 July Euro-summit looked at the gaping wound in the monetary union and decided on a small sticking plaster, but the markets were asking for an XXL one that really stuck. The 26 October Euro-summit decided on one that was at least bigger, but it bigger didn’t mean more popular, so somebody got on the phone to Beijing, Singapore, Japan, Abu Dhabi and Qatar and anyone else with loose change.
Eventually it was announced that these sovereign wealth funds had ‘agreed’ to fund the EFSF to enable it to back Greece (again), prop up the euro-banks who had lent to Greece and lost it, put up a firewall to protect Portugal, Italy and Spain against Greek contagion, and buy PIGS bonds, especially Greek ones.
The equity markets proved they are entirely irrational by bouncing up 5 per cent, as Klaus Regling got on a plane to Beijing but without a prospectus, application form or business plan, which at least rhymed with the fact that his client super-state hasn’t got a central bank or treasury that is answerable to a truly democratically-elected institution.
One can imagine the arrival scene at The Great Hall of the People as they all start bowing: ‘Good morning Mr Regling! Did you have a pleasant flight? I am sorry you lost your briefcase… Oh! You didn’t bring it! You mean you’ve got no papers to put in it? Well, how much do you need? More than a trillion euros?!
‘Why aren’t you putting up the money yourselves? Because you don’t want to lose it? So, your banks are writing off 50 per cent of their loans to Greece after a year, but then you want us to lend the EFSF another €110 billion for Greece, but if the same thing happens again, how do we get repaid, and by whom? Oh, you’re still working that one out…’
They would naturally also want to know what certain EU leaders meant by recent statements: What did Angela Merkel mean by, ‘This issue will occupy us for years’?
What did Sarkozy mean by: ‘It was always a mistake to have let Greece in in the first place’?
What did Berlusconi mean by: ‘The euro is a strange currency that has convinced nobody’? And by: ‘Italy is the second strongest economy after Germany’? Are the other fifteen in the eurozone worse than Italy?
The Chinese no doubt do have a plan to save the euro: buy Mercedes, Airbus, Rolls Royce – oh! That’s not in the eurozone, cross it out and add Volkswagen – Fiat, Danone, Avensis, Peugeot, SEAT, the Parthenon… but no eurobonds!