Former PM Lee: Singapore won't buy Europe bonds

By ALEX KENNEDY

SINGAPORE

Singapore has no plans to buy bonds from European countries facing a debt crisis, former Prime Minister Lee Kuan Yew said Wednesday.

Europe's monetary union will eventually break apart into two or three separate tiers because of economic differences among the member states, Lee said.

"It's going to be very painful because it's an admission that one Europe is not achievable," Lee said at a university forum. "You cannot expect the Greeks to march like the Germans."

Fears that Greece will default on its debt have undermined investors confidence and sent markets lower this month. Investors worry a Greek default could trigger similar moves in Portugal, Ireland, Spain and Italy and spark a global financial crisis.

Possible Chinese bond purchases of European debt would not save Europe from a monetary breakup, Lee said. Italy said Tuesday that officials had met with China's sovereign wealth fund about buying Italian bonds.

"The Chinese cannot rescue the Europeans even if they wanted to," Lee said. "It's easier to deal with 20-some weak European countries than 20-some united European countries."

Lee was Singapore's prime minister from 1959 to 1990 and is the father of current Prime Minister Lee Hsien Loong.