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China and Russia helping eurozone to boost own power in IMF
by Nina Achmatova
Moscow and Beijing like the Eurogroup rescue package but will loosen their pursestrings only through the International Monetary Fund to boost their own influence. Investments in Europe are needed to save their own growth.
Moscow (AsiaNews) – Wednesday’s agreement in Brussels to tackle Europe’s crisis is reason for “cautious optimism” in Moscow. Like China, Russia plans to use the euro debt crisis to increase its influence at the International Monetary Fund. Meanwhile, the head of the European Financial Stability Facility (EFSF) Klaus Regling landed in Beijing today.
“There are grounds for cautious optimism here," President Dmitry Medvedev's aide Arkady Dvorkovich told an investor conference. "I think that the markets will receive this decision adequately and treat it as sufficient for now."
On the eve of the overnight session in Brussels, Russia said that it backed the idea of using the International Monetary Fund (IMF) to help leverage the eurozone rescue fund.
One of the two options agreed for the European Financial Stability Facility (EFSF) should see the creation of an investment vehicle associated with the IMF that attracts investors from emerging markets to buy bonds in secondary markets.
Russia and other BRIC (Brazil, China and India) nations have welcomed the move as a way of both helping restore Europe's economy and raising their own profile within the fund.
Russia’s Deputy Economy Minister Klepach said that stagnation in Europe could cut the growth of the Russian economy from a forecast of 4 to 2.5 per cent this year.
"Our contribution has to run in parallel with the redistribution of IMF (voting) shares and the strengthening of the role played by emerging countries," Medvedev's economic adviser said.
In covering the eurozone agreement, Russian media stressed the role of countries like China. Behind titles like “Greece saved again” and “Europe and China save the banks”, newspapers like Kommersant and gazeta.ru noted that one of the main aim is to ensure Chinese intervention.
With foreign reserves worth US$ 3.2 trillion, China is seen as a potential saviour. With its US$ 530 billion, mostly from oil exports, Russia is also seen as another potential partner.
However, Beijing wants to know more about the plan before investing in the EFSF. The latter’s chairman, Klaus Regling, arrived in the Chinese capital today where he is scheduled to be China’s Deputy Finance Minister Zhu Guangyao.
According to Tomo Kinoshita, an economist with Nomura in Hong Kong, Beijing might want a political quid pro quo for investing in Europe to increase its influence at the IMF.
China already holds millions of Euros in EFSF bonds, and its reserves include US$ 800 million in Euros.