China to buy debt issued by Europe to fund Portugal

27 May 2011

London, United Kingdom, 27 May – China plans to buy the debt issued in June to fund the Portuguese state said the president of the European Financial Stability Fund (EFSF), Klaus Regling said, cited by British newspaper, the Financial Times.

The Portuguese government has agreed, in exchange for an austerity plan, a loan of 78 billion euros with the European authorities and the International Monetary Fund (IMF), 26 billion of which will come from the European Financial stability Mechanism (EFSM), managed by the community budget and the remaining 26 billion from EFSF.

The Financial Times reported that EFSF will start issuing debt in June to later fund its loan to Portugal and according to Regling, a “large proportion” will be bought by Asian investors, including the Chinese government.

Earlier this year China bought sovereign debt bonds issued directly by the Portuguese state. (macauhub)