Home' Trinidad and Tobago Guardian : May 14th 2015 Contents BG22 INTERNATIONAL
BUSINESS GUARDIAN www.guardian.co.tt MAY 2015 • WEEK TWO
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and accounting objectives
The European Union is seeking Asian
capital for a multi-billion euro invest-
ment plan it hopes will create more than
a million jobs and revive growth.
Through the creation of the European Fund for
Strategic Investment, presented in Hong Kong on
Thursday during its first roadshow outside Europe,
the EU seeks to inject 315 billion euros (£ 229 billion)
into a range of long-term projects from broadband
infrastructure to green energy.
To attract investors, the EU has pledged 16 billion
euros from its own budget in guarantees and is looking
to fund around 20 per cent of each project.
Despite the problems posed by the Greek crisis
and low growth, some Asian investors signalled an
appetite for Europe.
" Asia right now is flush with liquidity and European
companies are a bargain. It's a no brainer for Asian
investors, particularly Chinese ones, to diversify into
Europe," said Vincent Chu, Chairman of First Eastern
Investment Group, who has already invested more
than US$300 million in the region.
Chu said Chinese companies are keen to get into
Europe to access technology and know-how and
bring these back into Asia.
This know-how rests often with small, family-
owned European firms that are, however, reluctant
to accept Chinese investors, said Raymond Yip, deputy
executive director at the Hong Kong Trade Devel-
Asian investors, first of all Chinese, have already
started investing in the EU, particularly in the UK.
But are often faced with higher costs, a challenge for
the success of the EU plan.
"Workers in developed countries demand much
higher salaries than that of the mainland... So it will
be very difficult (for the Chinese firm) to profit," said
Gart Wong, an analyst at Chinese investment bank
Guotai Junan Securities.
Under the plan, EU institutions would act as junior
partners in any investment, meaning they would take
the first hit were the project to run into problems.
The plan, expected to win final approval in the
European Parliament by July, is already attracting
interest from sovereign wealth funds in Asia and in
the Gulf, a EU official told Reuters.
"We feel there are opportunities to invest in Europe,"
said George Yuen, a director at China's ICBC, the
world's biggest bank by market capitalisation.
"Of course, one has to deal with issues such as
high social costs. But we think the advantages out-
weigh the disadvantages."
EU looking to
Asia to spur
Greece admitted Tuesday it was scraping
the bottom of the barrel for cash as another
huge debt repayment loomed, adding pressure
to reach a rescue deal with its EU-IMF creditors
to avoid default and crashing out of the euro-
Athens only managed to repay 750 million
euros (US$845 million) due Tuesday to the
International Monetary Fund after tapping
into an emergency account, a central bank
source told AFP as alarm grew over Greece's
But billions more in loan repayments are
due over the next three months, and Greece's
Finance Minister Yanis Varoufakis warned that
his country risked running out of cash within
two weeks if no deal was reached by then with
its international creditors to unlock the last
tranche of aid funds.
The crisis sent European stocks sinking
Tuesday, mirroring sentiments across Asia
and on Wall Street.
"The liquidity issue is a terribly urgent issue.
It's common knowledge, let's not beat around
the bush," Varoufakis said on Monday after
talks with his Eurogroup counterparts in Brus-
"From the perspective (of timing), we are
talking about the next couple of weeks."
Athens has been locked in negotiations with
the European Union, the European Central
Bank and the IMF, seeking to unlock 7.2 billion
euros worth of remaining bailout funds that
the creditors are refusing to release unless
Greece signs up to certain economic reforms.
With the two sides standing firm on their
positions and Tuesday's payment to the IMF
due, the government was informed last week
by Greece's central bank chief Yannis
Stournaras that it could draw 660 million
euros from a special account held at the IMF,
like all member states.
That account holds Greek reserves and is
only meant to be used in cases of "extraor-
dinary need", the central bank source said,
adding that subsequent meetings with gov-
ernment officials and the IMF led to the release
of the funds.
The source added that it was not the first
time that Athens was tapping into the fund,
but that in previous cases smaller sums were
Greece would be required to replenish those
funds as soon as possible, experts said.
The remainder of the sum due to the IMF
was scraped together by the government. AFP
Greece raids emergency account to repay debt
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