Following the fifth such meeting between German Chancellor Angela Merkel and her counterpart in Beijing, Chinese Premier Wen Jiaobao hinted that European nations could in fact be receiving aid from one of the world’s fastest growing economies.  The comments, made at a national briefing, have helped to prop up the Euro temporarily.  Currently trading at 1.3146, the single currency has recovered from dropping to as low as 1.3100 in the overnight session.

During comments made at the start of the meeting, Premier Wen noted that the Chinese government is currently evaluating viable options in order to be “more deeply involved using the ESM and EFSF channels in solving the European debt crisis.”  The Chinese premier, however, did not make any definitive commitments towards the size or timing of any potential investment in the region.  Instead, Wen highlighted the simple fact that “it is very urgent and important to resolve Europe’s debt crisis”.

With over $3 trillion in foreign exchange reserves, China is being targeted by European leaders as a way to create a formidable backstop in dealing with the current crisis.  Eurozone leaders have recently also reached out to other nations like Russia, Brazil and India in forming investment channels through the International Monetary Fund.  But, the process still looks to take some time as government officials wrangle over the feasibility of such an arrangement and the underlying convenants involved with such a measure.

Nonetheless, the comments do give some support to Euro buyers as it presents a semi-viable alternative to the current predicament.  European pessimism re-entered the market recently amid comments by several European leaders – noting that the January 30th summit approved measure still remained “largely insufficient” in dealing with the current crisis.