China’s win-win situation

There’s only one thing more humiliating for the eurozone than China buying up its sovereign bonds — and that is if China doesn’t. To this end, head of the EFSF Klaus Regling, currently on a sales run in Asia, has said that some of the bonds of his newly souped-up SPIV may be denominated in yuan. Such a move would further enhance the renmimbi’s status, increasing the possibility of it supplanting the dollar to become the world’s reserve currency. And, even then, China may not be enticed.

With apparently no recognition of the irony, European leaders are saying that the euro rests on ‘solid fundamentals’ while considering switching some of their national debt to another currency to make it more palatable. Yesterday, Italy’s embattled PM Silvio Berlusconi had an outburst in which he described the euro as a ‘strange currency’ that ‘has convinced nobody’ — perhaps his most lucid statement in months.