3 Min Read
* Says BRICS have divergent views on Euro debt issue
* Says wrong to put big hopes on China
* China has yet to confirm steps to support Europe
By Benjamin Kang Lim and Zhou Xin
BEIJING, Sept 22 (Reuters) - Brazil's proposal that large emerging economies jointly provide new funds to help ease the crisis in the euro zone is not feasible, Wei Jianguo, a former Chinese vice commerce minister, told Reuters on Thursday.
South Africa's Finance Minister Pravin Gordhan said earlier that BRICS countries, namely Brazil, Russia, India, China and South Africa, will talk about the idea at Thursday's Washington meeting of emerging economies.
But Wei, now head of the China Centre for International Economic Exchanges (CCIEE), a top government think-tank, said in an interview that it would be difficult to carry out due to differences among the BRICS countries.
"It's just an idea, and in my view it's very hard to put it into practice," Wei said.
Wei, who advises the Chinese government on policy but has no direct involvement in the decision-making for this issue, said the plan neglects huge differences among emerging markets.
"(BRICS) countries are in different development stages with different foreign exchange reserve management systems, and they have different ideas and preferred approaches to address the euro debt crisis," he said.
"They are unlikely to reach a unified plan."
Under Brazil's proposal, BRICS countries would make billions of dollars in new funds available to the International Monetary Fund (IMF) as a way to help ease the crisis in the euro zone.
Russian Finance Minister Alexei Kudrin told reporters that countries that hold substantial reserves may assist in bailing out the euro zone's debt-ridden states "on certain conditions".
With about a quarter of its $3.2 trillion foreign exchange reserves in euros, China has repeatedly voiced confidence in the euro zone, but Beijing has been reluctant to confirm concrete steps it would take to support Europe.
China's foreign exchange reserves are three times bigger than those of the four other BRICS countries combined.
However, Wei said Europe should not put too much hope on China that Beijing would purchase a lot of euro bonds.
"Europe should absolutely not put too high of expectations on China," Wei said.
He added that the euro debt crisis has deep-rooted causes, namely a lack of coordinated fiscal policies within a currency union.
"If this problem persists, more problems will emerge even if the current crisis can be overcome," he said.
"That's not something that can be solved by a BRICS fund," he said. (Editing by Don Durfee and Ken Wills)