One of the advantages in China having a state-controlled press is that it makes it easier for the observer to understand what Beijing is thinking. When the China Daily prints an editorial highly critical of the EU and its attempts to get control of its rapidly worsening economic situation, it is highly probably that this is a direct message from the Chinese Government.
The article – actually written by an economic advisor to the EU – has a strong message for Europe, and in particular the ECB (European Central Bank) to act now. The proposal is for eurobonds to be created in an orderly fashion in order to shore up the national economies.
Eurozone leaders could also set out a road map toward eurobonds, subject to strict conditionality, and tied to a credible mechanism for ensuring fiscal prudence. This would provide an additional incentive for governments that wish to qualify to introduce the necessary reforms, while reassuring the ECB and markets that governments remain committed to making the euro work.
It is also interesting that the CD currently has a debate on its pages discussing the future of the EU – and the answer of both contributors is pretty negative. So whilst China wants the EU to get its act together, it seems also to be writing off the Euro project as feasible.
What though would be the advantage to China of an EU break-up? On the face of it, nothing, given that the EU is the country’s biggest trading partner. But a weakened EU would remove a strategic block from the international scene, and perhaps Beijing thinks it easier to get its way in the world dealing with smaller nation states than a continental monolith. It is hard to say.
The only thing certain is that, whatever the political outcome, given the importance to China of the EU economies we can expect more rattling in the media until the EU is back on the straight and narrow. This could take some time.