On May 15, Dean Cheng Siwei presented himself at the academic forum co-sponsored by National School of Development, Peking University, China Society for People’s Friendship Studies and Embassy of the Hellenic Republic. The theme of the forum was “Opportunities， Challenge & Prospect: The European Debt Crisis and Influence of China-EU Cooperation”.
Dean Cheng Siwei Making a Speech
Dean Cheng said that EMU developed quite well at its establishment. It granted loans to less developed countries like Ireland, meanwhile, big powers like Germany also grew rapidly through trades. However, EMU has an inborn defect, that is, unified monetary but non-unified finance. Therefore, competitive nations get benefits, but weak countries cannot increase their exports through devaluation, what is more, they don’t have enough foreign exchange reserves to deal with the unexpected.
“The only way is to borrow money to cover the debts after the crisis. It can only ask for help from IMF and ECB, with harsh terms. A tighter policy would be a good solution, but it would be difficult for people to accept as the tighter policy would lower the welfare”, said Dean Cheng.
He pointed out that there were only two solutions for the Greek debt crisis. The Eurozone could discuss together to go over the difficulties and give Greece opportunities to develop its economy. Or Greece could leave the Eurozone. However, the second choice would do more harm than good in a long run.
In Cheng’s opinion, China’s strength is limited, but she should do something under IMF.