Even as French President Nicolas Sarkozy advocated for an expansion of the European Financial Stability Facility to allow for the inclusion of sovereign wealth funds, he was getting the cold shoulder from Beijing which warned it could not play as large a role in the solution of the eurozone crisis like many had hoped. Klaus Regling traveled to persuade Beijing to open up its coffers and allow the EFSF access to its $3.2 trillion in accumulated funds, but China needed more clarity on the situation before investing. Chinese state news agency Xinhua announced that China could not solve Europe’s economic problems and that it was up to the Europeans themselves to find a solution to the crisis. All of this coupled with the Greek calls for referendum on the bailout proposals have done nothing to assuage markets who fear financial contagion in Europe. The Greek government has been urged to sale state businesses and shed government employees in an effort to comply with the terms of a debt slashing agreement that would see its debt halved.
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