News / Economy

Analysts: BRICS Unlikely to Rush to Europe's Aid

William Ide

Members of the global grouping know as the BRICS -- Brazil, Russia, India, China and South Africa --- will meet in Washington this week to talk about ways they can help Europe with its debt crisis.  The chance for emerging nations to lend the developed world a hand is a unique opportunity, and a sign of their growing influence on the global stage.

Europe is in turmoil over its beleaguered economy and so austerity measures meant to resolve its debt crisis have met with public backlash.  

European Union finance ministers met in Poland last week in search of answers, joined by U.S. Treasury Secretary Timothy Geithner.

“Europe’s obviously under a lot of pressure, and they face a lot of challenges and it’s affecting us.  It’s affecting confidence here and around the world; not just in Europe,” Geithner said.

And that’s where the BRICS come in.  China and other emerging nations have weathered the global financial crisis and have deep pockets of foreign currency reserves.

Chinese economist Luo Xiaopeng says there is no doubt China will offer to help.

“They have to do this for many reasons.  One is the Chinese economy is still really reliant on exports,” Luo said.

Europe is China’s second largest trading market and the euro accounts for nearly 30 percent of China's $3 trillion in foreign reserves.  And China wants to shift more of its reserves to the euro to reduce its reliance on the U.S. dollar.

“Now if for some reason the eurozone collapses because of Greece, Italy, Portugal or Spain go down in a chain, this would be what I call a global financial crisis.  It will drag everybody down,” said Yukon Huang, a senior associate at the Carnegie Endowment for International Peace.

But, it is unlikely China or others will lend Europe a hand, he says, until Europe has a solution to its debt crisis in place.

“Right now there’s no such agreement.  So China is not going to put its money into a situation where there are, in fact, enormous risks and only downsides,” Huang said.

If China does step in to help, some analysts and Chinese state media suggest that China could use its aid to Europe to try to get earlier recognition of China as a full-market economy, or an economy that operates according to market forces.  It's a status China has long viewed as offensive.

“After so many years of humiliation [from Europe], there is kind of a kneeling down to beg from us.  So this kind of a thing you cannot underestimate the satisfaction and joy of those Chinese politicians,” Luo said.

For now, the uncertainty in Europe and what is being done to address the eurozone's debt crisis will be front and center when BRICS finance ministers meet in Washington Thursday.

You May Like

At International AIDS Conference One Goal, Many Paths

The 12,000 delegates attending 20th International AIDS Conference in Melbourne have vastly different visions about how to eradicate disease More

Disasters May Doom Malaysia’s Flag Carrier

Even before loss of two jets loaded with passengers on international flights, company had been operating in red for three years, accumulating deficit of $1.3 billion More

Afghan Presidential Vote Audit Continues Despite Glitches

Process has been marred by walkouts by representatives of two competing candidates, Abdullah Abdullah and Ashraf Ghani More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Nature of Space Exploration Enters New Agei
X
Elizabeth Lee
July 20, 2014 2:36 AM
Forty-five years ago this month, the first humans walked on the moon. It was during an era of the space race between the United States and the Soviet Union. World politics have changed since then and -- as Elizabeth Lee reports -- so has the nature of space exploration.
Video

Video Nature of Space Exploration Enters New Age

Forty-five years ago this month, the first humans walked on the moon. It was during an era of the space race between the United States and the Soviet Union. World politics have changed since then and -- as Elizabeth Lee reports -- so has the nature of space exploration.
Video

Video Chicago’s Argonne Lab Developing Battery of the Future

In 2012, the U.S. Department of Energy’s Office of Science awarded a $120 million grant to a new technology center focused on battery development - headquartered at Argonne National Laboratory in suburban Chicago, Illinois. As VOA’s Kane Farabaugh reports, there scientists are making the next technological breakthroughs in energy storage.
Video

Video In NW Pakistan, Army Offensive Causes Massive Number of Displaced

Pakistan’s army offensive in North Waziristan has resulted in the large-scale displacement of the local population. VOA's Ayaz Gul reports from northwest Pakistan where authorities say around 80 percent of the estimated 1 million internally displaced persons [IDPs] have settled in Bannu district, while much of the remaining 20 percent are scattered in nearby cities.
Video

Video Kurdish Peshmerga Force Secures Kirkuk, Its Oil

The Kurdistan regional government has sent its Peshmerga troops into the adjacent province of Kirkuk to drive out insurgents, and to secure the area's rich oil fields. By doing this, the regional government has added a fourth province to the three it officially controls. The oil also provides revenue that could make an independent Kurdistan economically strong. VOA’s Jeffrey Young went out with the Peshmerga and filed this report.
Video

Video Malaysia Reeling: Second Air Disaster in Four Months

Malaysia is reeling from the second air disaster in four months involving the country’s flag carrier. Flight 340 vanished in March and despite an extensive search, no debris has been found. And on Thursday, Flight 17, likely hit by a surface-to-air missile, came apart over eastern Ukraine. The two incidents together have left more than 500 people dead. VOA Correspondent Steve Herman reports from Kuala Lumpur.
Video

Video Diplomatic Crisis Grows Over MH17 Plane Crash

The Malaysia Airlines crash in eastern Ukraine is drawing reaction from leaders around the world. With suspicions growing that a surface-to-air missile shot down the aircraft, there are increasing tensions in the international community over who is to blame. Henry Ridgwell reports for VOA from London.
Video

Video Undocumented Immigrants Face Perilous Journey to US, No Guarantees

Every day, hundreds of undocumented immigrants from Central America attempt the arduous journey through Mexico and turn themselves over to U.S. border patrol -- with the hope that they will not be turned away. But the dangers they face along the way are many, and as Ramon Taylor reports from the Rio Grande Valley in Texas, their fate rests on more than just the reception they get at the US border.
Video

Video Scientists Create Blackest Material Ever

Of all the black things in the universe only the infamous "black holes" are so black that not even a tiny amount of light can bounce back. But scientists have managed to create material almost as black, and it has enormous potential use. VOA’s George Putic has more.
Video

Video Fog Collector Transforming Maasai Water Harvesting in Kenya

The Maasai people of Kenya are known for their cattle-herding, nomadic lifestyle. But it's an existence that depends on access to adequate water for their herds and flocks. Lenny Ruvaga reports for VOA, on a "fog collector."

AppleAndroid

World Currencies

EUR
USD
0.7305
JPY
USD
101.53
GBP
USD
0.5830
CAD
USD
1.0656
INR
USD
60.075

Rates may not be current.