Brussels - AFP
The eurozone\'s rescue fund said Saturday that triple-As from all three rating agencies should encourage investors to back the bloc\'s strategy but warned it could take three years to resolve the debt crisis. The across-the-board AAA rating came a day after the European Financial Stability Facility (EFSF) chief Klaus Regling was in Beijing courting Chinese investment to support the crucial bailout fund. The highest possible rating was confirmed on the basis of amendments decided in July that took effect on October 18, bringing the fund\'s lending capacity to 440 billion euros ($622 billion), with a guaranteed commitment of 780 billion euros, EFSF said in a statement. The three agencies \"affirmed the best possible credit rating,\" meaning AAA for S&P and Fitch and (P)Aaa for Moody\'s, the statement said two days after EU leaders decided in marathon talks on a complex plan to get Greece\'s debt under control and strengthen EU banks. The EFSF\'s short-term rating was also the highest possible, at A-1+ for S&P, (P)P-1 for Moody\'s and F1+ for Fitch, the statement said. \"Confirmation of the highest possible credit rating shows the confidence in the strategy of the euro area to restore financial stability,\" Regling said in the statement. S&P, reiterating the AAA rating on Friday, said assigning a stable outlook reflected the \"almost certain\" likelihood that EU governments would back the EFSF \"in the event of financial distress.\" But Fitch said that the 50 percent writedown of Greek debt held by banks -- another key facet of the deal -- could, despite claims to the contrary, see Greece ruled in default, possibly triggering a cascade of damage throughout the financial system due to the activation of default insurance contracts. Europe is looking for funds to further increase the EFSF, set up in May 2010 and designed to provide financial assistance to European economies at risk of default, such as Greece, Ireland and Portugal. Regling was in China Friday, speaking after EU leaders announced measures including boosting the firepower of the fund to one trillion euros. China, whose foreign exchange reserves -- valued at $3.2 trillion -- are the world\'s largest, was \"interested in finding attractive, solid, safe investment opportunities,\" Regling told a media briefing. During a talk at Beijing\'s Tsinghua University on Saturday, the EFSF head said he expected the eurozone\'s economic problems to linger for several years yet. \"I think the European problems will be well-tackled and overcome over the next two to three years,\" Dow Jones quoted Regling as saying. \"But it does not mean that all problems in this world will have disappeared,\" he added. Longer-term challenges, Regling said, included a \"big structure shift in financial markets\" caused by the damaged appeal of sovereign debt among investors, and boosting competitiveness in some countries. \"Sovereign debt, which for decades or centuries were the predominant risk-free asset, may be losing that status, not only in Europe but also in other countries,\" he said. Regling\'s words were echoed by German Finance Minister Wolfgang Schaeuble, who said in an interview with the weekly Spiegel magazine, to be published Monday: \"We made an important step forward at last week\'s summit. \"But it\'s not going to be the final meeting on the matter. Europe has a long way to go until all its problems are solved.\" The minister also called on Italy to do its part. The country\'s 1.9 trillion euro debt is equal to 120 percent of its gross domestic product, compared with the EU\'s limit of 60 percent. \"Italy needs to convince the markets that it has the willingness and the determination to quickly put into place the reforms required,\" Schaeuble said. Some analysts meanwhile played down the prospect of China making a substantial investment. Expectations had been high ahead of Regling\'s visit, with the Financial Times quoting a source saying the world\'s second-largest economy could inject more than $100 billion (70.5 billion euros). \"China\'s economy is slowing and they may well want a war chest to support their own economy,\" Julian Jessop, chief global economist at London research house Capital Economics, told AFP. China\'s vice finance minister has said his country would wait for more details before committing to invest in the fund. Regling\'s next stop is Japan, which on Friday offered vague promises that it will help Europe, but left itself a week to decide what it might do to expand its already hefty contribution to the EU\'s bailout fund.