Germany’s Merkel seeks to ease eurozone fears in China

February 2, 2012 11:30 am

, BEIJING, Feb 2 – German Chancellor Angela Merkel sought to reassure Beijing over the crisis in the eurozone and urged China to press Tehran on its nuclear programme as she began an official visit on Thursday.

“The euro as our common currency has made Europe stronger,” Merkel said in a speech ahead of talks with China’s Premier Wen Jiabao.

“The European Union — in particular those states that have adopted the euro — has made considerable progress in the last two years.”

Merkel’s three-day trip is aimed partly at boosting confidence in the eurozone after a sovereign debt crisis that has seen a wave of credit-rating downgrades and brought Greece to the brink of bankruptcy.

Europe is China’s top export market and Beijing has watched with increasing concern as the debt crisis has deepened, repeatedly urging European leaders to get a grip on the situation.

The leader of Europe’s biggest economy said EU members were now “deeply convinced” that they were on the right track with a treaty agreed by most EU nations on Monday that aims to stop countries from overspending.

The treaty — pushed by Germany and the European Central Bank — will require governments to introduce laws on balanced budgets and impose near-automatic sanctions on countries that violate deficit rules.

It will come into force after at least 12 euro nations ratify it, and only those countries that sign up will be able to access bailout aid from a new rescue fund.

In a speech to the Chinese Academy of Social Sciences, Merkel said China — the world’s second-biggest economy — “must use its influence to tell Iran that transparency is a must and its nuclear programme must be open”.

A German government source said earlier the chancellor would also call on Beijing not to take advantage of Europe’s ban on Iranian oil — imposed on Tehran over its nuclear stance — to boost its own imports of the resource.

The US, the European Union and others have ramped up sanctions to target Iran’s oil industry and central bank since a UN atomic watchdog report in November raised suspicions Tehran had done work on developing nuclear weapons.

Iran insists its nuclear drive is for peaceful purposes and that the International Atomic Energy Agency report was based on “forgeries” provided by its enemies.

Merkel, who will meet President Hu Jintao on Friday, also touched on Syria in her speech, saying it was “important that the international community speak with one voice at the United Nations.”

The German leader is expected to ask for Beijing’s support for a UN Security Council resolution against Syria, where fighting between President Bashar al-Assad’s security forces and rebels is escalating.

China has a veto at the Security Council.

On bilateral trade between China and Germany — which reached $169 billion in 2011, an 18.9-percent increase from the previous year — Merkel called for a level playing field for German firms operating in China.

“As German entrepreneurs, we want to be treated on an equal footing with Chinese companies,” she said.

Merkel’s trip comes just days after deadly unrest hit China’s Tibetan-inhabited areas and she indicated that human rights would be on the agenda.

“Germany has always advocated an open, political dialogue, including on controversial issues such as human rights and building a state of law,” she said.

On Friday, Merkel will fly to the southern province of Guangdong — where nearly 500 German companies are already present — with Wen and executives from the energy, chemicals, engineering, banking and electronics sectors.

Her visit to the wealthy manufacturing hub will include a meeting with Gan Junqiu, the state-backed Catholic bishop of Guangzhou — the provincial capital — according to a German diplomatic source.

Rare earths — valuable elements that are used in the production of high-tech products and which are of “very great importance for the German economy” — will also be on the table, a German government source said.

China has been accused of deliberately restricting rare-earth exports to drive up prices and force manufacturers onto its shores, but Beijing says it limits them for environmental reasons to reduce mining-related pollution.


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