The European Central Bank has provided a further €530 billion ($713 billion) of cheap three-year money to 800 banks across the EU, in a bid to make more money available to businesses and further ease government borrowing costs.
The size of the fund would be “essential input” when G20 nations consider providing more resources to the IMF to assist the region, finance ministers and central bankers from leading economies said in their final communiqué after two days of meetings in Mexico City.
In its November forecast, the European Commission predicted that only Greece and Portugal would contract this year. Now, Spain, Italy, Belgium, the Netherlands, Cyprus and Slovenia are expected to shrink in 2012.
Europe is China’s largest trading partner, with trade worth around $740 billion flowing between the two in 2011. Last week the IMF warned that an escalation of the EU debt crisis could halve China’s growth rates.