Kathrin Hille
Angela Merkel, the German chancellor, told an audience of Chinese scholars on Thursday that European countries were taking serious steps to rein in debt and strengthen growth, kicking off a mission to reassure China over the crisis in the eurozone.
?I want to tell you: The euro has strengthened Europe,? Ms Merkel said in a speech at the Chinese Academy of Social Sciences, one of the country?s leading academic institutions, which functions as a think-tank for the government. ?This is not a crisis of the euro, it is a debt crisis and a crisis of different levels of competitiveness,? she said.
Ms Merkel?s visit comes just days after the EU decision to make the budget discipline required from the 17 euro economies part of national law, which she had been pushing for strongly. Her trip has gained significance in explaining European crisis management to China, and convincing the holder of the world?s largest foreign exchange reserves at almost $3.2tn, that investing in euro assets is safe.
But Ms Merkel, who was to have extensive talks with Wen Jiabao, China?s premier, later on Thursday before meeting president Hu Jintao on Friday, also sought to stress that she would press her Chinese counterparts to support actions against Iran and Syria, two of the countries that top the global political agenda.
Acknowledging Beijing?s opposition to a new round of sanctions against Iran, Ms Merkel said it could use its influence to tell Iran to be more transparent about its nuclear programme.
The German chancellor expressed strong concerns about the situation
in Syria. She said that it would be ?sad? if the United Nations Security Council failed to come up with a resolution on the country and pledged
to discuss this with Beijing.
But questions from the audience showed that China?s focus is clearly on Europe. Ms Merkel said the financial crisis required every eurozone member country to ?do their homework?, but also solidarity among the group, and claimed that Europe was growing together in the crisis.
That contrasts with Chinese perceptions that the euro group is plagued by frequent friction and difficulties
in communicating a clear common agenda.
The German chancellor explained her view that the European economies needed to be strengthened through a two-pronged approach of fiscal discipline and structural reforms. Asked whether the fiscal pact and the European Stability Mechanism combined foreshadowed a future EU finance ministry, she said: ?We must move towards that step-by-step.?
In response to a question, Ms Merkel said European countries were looking into whether there was a way to limit the negative fallout from sovereign ratings downgrades in financial crises. ?We must face [rating agencies?] judgment, they tell the truth,? Ms Merkel said. ?But [ratings decisions] can have a reinforcing effect on a crisis.?