China agrees to ‘invest’ in euro bailout fund

China has agreed to invest in Europe’s bailout fund, two senior EU diplomats told AFP yesterday, hours before a crunch summit on the eurozone debt crisis.

“China is in,” said one of new plans to boost the European Financial Stability Fund with a spin-off investment vehicle to be used to prop up debt-laden nations.

“But not yet Brazil, Russia, India or South Africa,” he added, referring to the four other countries in the BRICS group of emerging powers.

The diplomats gave no indication as to the scale of China’s likely investment, although an EU official said EFSF chief executive Klaus Regling would leave for Beijing on Thursday, after the summit. Asked whether other BRICS countries had formally indicated a similar interest, another diplomat said he was “not aware they have”.

The five emerging giants form a key lobby going into a G20 summit on November 3-4 at which the United States leads global demands for a lasting European Union solution to the debt crisis that began in Greece nearly two years ago.

“Argentina has said no,” the second diplomat said of global talks about designing a new vehicle that would allow EU leaders to leverage the €440 billion EFSF into a €1 trillion-plus war chest.

“Buenos Aires was never intended to be the main buyer,” the first said of the rejected approach to Argentina, a country that emerged from a debt default in 2002.