Euro will not fail, China's Xinhua says

Published 11/30/2010, 01:20 AM
Updated 11/30/2010, 01:24 AM

BEIJING, Nov 30 (Reuters) - The debt crisis rocking the eurozone does not spell the end of the euro, Xinhua, China's official news agency, said in a commentary on Tuesday.

"As a major achievement of European integration, the euro is a landmark in the world's monetary history. It has become the second-largest reserve currency as well as the second most traded currency in the world after the U.S. dollar," the agency said.

"Despite its shortcomings, which have been exposed by the debt crisis, the euro has brought economic benefits and currency stability to its members. A breakup of the eurozone would be politically unacceptable," Xinhua added.

The commentary was written under a Brussels dateline.

It said the euro was facing its toughest challenge since its launch in 1999, but the European Union had the financial means to deal with the drama.

The EU's financial rescue mechanism had enough money to bail out Portugal if necessary, Xinhua said.

"If the crisis engulfs Spain, it would spell big trouble, but not the end of the euro either," it added.

China, which holds an undisclosed proportion of its $2.65 trillion in official reserves in euro assets, has repeatedly expressed its support for the single currency.

China has bought Spanish debt this year and, on a recent visit to Athens, Premier Wen Jiabao said China would be a buyer of Greek debt when the government returned to the market. (Reporting by Alan Wheatley; Editing by Ken Wills)

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