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27 Oct, 2011 09:42

‘China will refrain from saving the Euro’

Despite China being perhaps the only country with sufficient cash reserves to help the EU out of its crisis, the head of a Hong Kong-based investment company does not believe it will get involved at this stage.

France’s move to have the EU print more money in order to deliver Greece’s 100-billion-euro austerity package was vetoed by Germany. So the EU is left with no choice but to find real money, Francis Lun, managing director at Lyncean Holdings, told RT. “And there are not a lot of places in the world with real money today,” he added, “And China has $3 trillion of foreign exchange reserves, so it was envisioned in a leading role in saving the euro”.“When they [the EU] run out of money, they go to China and say please give us your foreign exchange reserve to solve the problem. But I doubt China has to play that role. It should be played by Germany, France and the EU. If you don't have money – sell your assets or raise some taxes like the US does. They will refrain from playing a leading role in saving the euro,” Lun said.Lun believes China will hold back despite having much to gain from helping Europe in terms of “political leverage and influence.”“When you look around the world, both the EU and the US are in deep crisis and China is the only country that is not in a financial crisis and has a huge foreign exchange surplus. China can use this money and build up a political connection and influence, so that in future in foreign policy the EU will stand on the side of China, instead of against,” Lun concludes.