Not a band-aid but a “BRIC”-aid.
The European summit over the weekend provided too little, too late. But happily, an unexpected new cavalry is galloping in to replace the trio of reluctant institutions expected to bail out Greece. The reluctant International Monetary Fund, dispenser of money from the whole world, not just the euro block, is rich but unwilling to pay for Greece and the other eurozone countries' banking and budget mess. Think of what the Tea Party would say if the USA chips in 20% of a rescue package! The British, who are not in the eurozone and rather hate the common currency, are also seriously negative about doing their bit. And the highly conservative European Central Bank has said “non” to maneuvers to tap into its coffers.
But markets are perpetually cheerful and today's designated cavalry riding to the rescue is known as the BRIC group: Brazil, Russia, India, and China. The other three may not have to do anything if China follows up on its plan to aid the “temporary” embarrassment of the European Union countries and their banks as some government spokeswoman in Beijing promised.
I think you can forget about countries like Brazil, Russia, and India joining the rescue. They have to answer to their own populations just as Germany or Britain or the USA does. Putin wants to lure foreigners into investing in Russia, not to invest Russian money in foreign places. Brazil has vast needs without crossing borders. India desperately has to upgrade its infrastructure at home and lacks spare ready cash for euro-needs.
China, however, does not actually have a mechanism for public scrutiny of Beijing's decisions. So China can play rescuer. The key question is what's in it for the Chinese? What geopolitical advantage will China get in return for its euro- largesse?
Its own banks are teetering on government life-support. Its people are poorer than even the poorest EU ex-Communist countries and much poorer than Greeks. Its domestic population is not allowed to demonstrate violently or strike peacefully against austerity programs. It gobbles up raw materials in former Euro-colonies in Africa and Latin America.
Will China demand a hands-off policy to a continued resource grab? Will Beijing demand European help in cracking down on Tibetans and Uighars? Will Chinese victims of high-level corruption and pollution and repression be welcomed by Europe's democracies? Will Chinese claims against its neighbors get support from Brussels?
Or will China merely seek to be repaid the cash it extends now with more cash in the future? I expect this is unlikely. For whatever it is worth, I think the euro leaders would be better off figuring out a way to get money out of the IMF or PIMCO.