News / Economy

Analysts: BRICS Unlikely to Rush to Europe's Aid

TEXT SIZE - +
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

Multimedia Relatives of South Korean Ferry Victims Fire at Authorities

46 people are confirmed dead, but some 250 remain trapped inside sunken ferry More

War Legacy Haunts Vietnam, US Relations

$84 million project aims to clean up soil contaminated by Agent Orange More

Wikipedia Proves Useful for Tracking Flu

Technique gave better results than Center for Disease Control (CDC) and Google’s Flu Trends 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.
Ukraine, Russia, United in Faith, Divided in Politicsi
X
Michael Eckels
April 19, 2014
There is a strong historical religious connection between Russia and Ukraine. But what role is religion playing in the current conflict? In the run-up to Easter, Michael Eckels in Moscow reports for VOA.
Video

Video Ukraine, Russia, United in Faith, Divided in Politics

There is a strong historical religious connection between Russia and Ukraine. But what role is religion playing in the current conflict? In the run-up to Easter, Michael Eckels in Moscow reports for VOA.
Video

Video Face of American Farmer is Changing

The average American farmer is now 58 years old, and farmers 65 and older are the fastest growing segment of the population. It’s a troubling trend signaling big changes ahead for American agriculture as aging farmers retire. Reporter Mike Osborne says a new report from the U.S. Census Bureau is suggesting what some of those changes might look like... and why they might not be so troubling.
Video

Video Donetsk Governor: Ukraine Military Assault 'Delicate But Necessary'

Around a dozen state buildings in eastern Ukraine remain in the hands of pro-Russian protesters who are demanding a referendum on self-rule. The governor of the whole Donetsk region is among those forced out by the protesters. He spoke to VOA's Henry Ridgwell from his temporary new office in Donetsk city.
Video

Video Drones May Soon Send Data From High Seas

Drones are usually associated with unmanned flying vehicles, but autonomous watercraft are also becoming useful tools for jobs ranging from scientific exploration to law enforcement to searching for a missing airliner in the Indian Ocean. VOA’s George Putic reports on sea-faring drones.
Video

Video New Earth-Size Planet Found

Not too big, not too small. Not too hot, not too cold. A newly discovered planet looks just right for life as we know it, according to an international group of astronomers. VOA’s Steve Baragona has more.
Video

Video Copts in Diaspora Worry About Future in Egypt

Around 10 percent of Egypt’s population belong to the Coptic faith, making them the largest Christian minority in the Middle East. But they have become targets of violence since the revolution three years ago. With elections scheduled for May and the struggle between the Egyptian military and Islamists continuing, many Copts abroad are deeply worried about the future of their ancient church. VOA religion correspondent Jerome Socolovsky visited a Coptic church outside Washington DC.
Video

Video Critics Say Venezuelan Protests Test Limits of Military's Support

During the two months of deadly anti-government protests that have rocked the oil-rich nation of Venezuela, President Nicolas Maduro has accused the opposition of trying to initiate a coup. Though a small number of military officers have been arrested for allegedly plotting against the government, VOA’s Brian Padden reports the leadership of the armed forces continues to support the president, at least for now.
Video

Video More Millenials Unplug to Embrace Board Games

A big new trend in the U.S. toy industry has more consumers switching off their high-tech gadgets to play with classic toys, like board games. This is especially true among the so-called millenial generation - those born in the 1980's and 90's. Elizabeth Lee has more from an unusual café in Los Angeles, where the new trend is popular and business is booming.
Video

Video Google Buys Drone Company

In its latest purchase of high-tech companies, Google has acquired a manufacturer of solar-powered drones that can stay in the air almost indefinitely, relaying broadband Internet connection to remote areas. It is seen as yet another step in the U.S. based Web giant’s bid to bring Internet to the whole world. VOA’s George Putic reports.
AppleAndroid

World Currencies

EUR
USD
0.7217
JPY
USD
102.17
GBP
USD
0.5949
CAD
USD
1.1009
INR
USD
60.326

Rates may not be current.