EU leaders meet to tackle debt crisis

Experts said their expectations are very low as European Union leaders gather for another summit on Thursday and Friday to try to tackle the debt crisis, and they warned that China will be further affected by economic depression in Europe.

The leaders are scheduled to discuss policy options to allow the EU to demand changes to member countries' budgets.

While a permanent bailout agency, the European Stability Mechanism, is set to be to put into operation after the summit, bailout proposals from Spain and Cyprus may be open to discussion. The summit will also discuss a growth package to deal with grave employment prospects across Europe.

Saying his expectations regarding the summit are "very low", Giles Merritt, secretary-general of the Brussels-based think tank Friends of Europe, said the unfruitful outcomes from one summit after another will have a huge impact on China.

"The aftershock of the European crisis on China would not only be limited to the EU-China trade relations, but a lot more," said Merritt.

He said that China, as an export-led economy, would see a continuing decline in European demand for its products, with slowing growth in China possibly leading to rising unemployment.

Since the end of 2009, European leaders have gathered up to 20 times in Brussels to discuss the crisis. However, the EU remains short of institutional arrangements to fix fiscal loopholes in member countries' financial systems.

Meanwhile, Germany and France, the driving forces of the EU, are at odds over the establishment of eurobonds to stimulate the economy and create jobs.

In a bid to help tackle the European debt crisis, President Hu Jintao announced at the G20 summit earlier this month that China will contribute $43 billion to the IMF recapitalization of $430 billion.

Zhang Jianxiong, an expert with the Institute of European Studies at the Chinese Academy of Social Sciences, said the determination expressed by EU leaders at the summit to help nations in trouble and try their best to maintain the eurozone is good news for the Chinese economy.

Contact the writers at fujing@chinadaily.com.cn and lixiaokun@chinadaily.com.cn

Tan Xuan contributed to this story.