September 23, 2011

China to support the Caribbean - David Jessop

By David Jessop

News Americas, LONDON, England, Fri. Sept. 23, 2011: Two separate developments in the last week, both involving China, demonstrates the fundamental ways in which international relationships are changing.

The first involved China subtly suggesting that it might provide financial support for Eurozone economies in difficulty. The second was the announcement at the opening of the Third China-Caribbean Economic and Trade Cooperation Forum in Port of Spain that Beijing would make available over US$1billion in loans and other assistance for Caribbean economic development projects.

In Europe many economies are in trouble. Greece, Italy, Spain Portugal, Ireland and United Kingdom have had to take drastic action to address high levels of debt and low growth. However, the markets have not been convinced that some of the Governments concerned will be able to institute the tough austerity measures they have announced. This is particularly so in the case of Greece and Italy where special pleading by powerful interest groups has caused Government to back track on measures already announced, creating uncertainty about whether the nations concerned might default.

As these nations are within the Eurozone, this has had the effect of raising questions about the whole European integration process. In economically strong and fiscally correct nations at the heart of the Eurozone like Germany, domestic political pressure is making nations reluctant to provide further financial support for those EU states that seem incapable of bringing their economies under control. Somewhat over simplified, the effect is that if economically strong nations are unwilling to bail out weak Eurozone economies, the Eurozone, and by extension the European Union, is unlikely to survive in its present form.

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