Eurozone Crisis Update: Accord Reached, China is White Knight

Europe’s leaders have made significant progress in an accord to resolve the regions festering economic crisis.
Eurozone leaders have agreed to have bankers write-off 50% of their exposure to toxic sovereign debt issued by troubled countries including Greece, Portugal, Ireland and Spain.

Furthermore the European Financial Stability Facility (EFSF) will be boosted from its current €400 Billion to € 1 Trillion.

Yet more good news for Europe will potentially come out of China today as sources close to the situation speculate China is willing to contribute up to € 70 Billion in order to top up the EFSF.

However the Chinese will intervene only if Europe grants the Asian superpower economic and political concessions including an assurance that other countries will contribute to the EFSF as well as guarantees that Eurozone leaders will not criticize China’s foreign exchange rate policy.

The USA and China have long been at war over this same policy, and if the Eurozone grants that concession, the USA would have lost a strategic ally in its war against China’s economic policy, paving the way for China to flex more economic policy muscle.

According to Papandreou, the leader of Greece, “Our collective effort is what gave us the most important weapons in the negotiations. Not just for our debt or funding, but for our very future…This crisis gives us the opportunity and the deal gives us the time to decide what is important for Greece.”