Italy looks to China for debt solutions
Steve Chiotakis: European stock markets are under a whole lot of pressure again today, amid fears the Greek debt crisis will spread — and spread fast. Next door in Italy, that country’s been working to raise revenues to avoid having to be bailed out by the European Union or IMF. And Italy is now looking to China for help.
From our European desk now, here’s Marketplace’s Stephen Beard.
Stephen Beard: The head of China’s sovereign wealth fund was reportedly in Rome last week. He was there to discuss the possibility of buying Italian government bonds. That gave financial markets quite a boost. A Chinese wall of money might be just the thing to stop the downward spiral in the eurozone. But doubts are creeping in.
Steve Barrow is a currency strategist with Standard Bank.
Steve Barrow: There’s a lot of speculation in the market that China has actually not committed to this. And that’s putting more pressure on the Italian bond market and, as a consequence of that, on stock markets and on the euro.
He points out that there’s also been talk of the Chinese buying Greek government bonds — but that’s hardly helped the Greeks. Markets indicate there’s now a 98 percent chance of the government in Athens defaulting.
In London, I’m Stephen Beard for Marketplace.
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