BEIJING  - China’s Premier Wen Jiabao said Tuesday his country was ready to increase its participation in efforts to resolve Europe’s debt crisis, after holding talks with EU leaders in Beijing.

Wen said China wanted to see Europe — its biggest trading partner — “maintain stability and prosperity”, a day after ratings agency Moody’s downgraded Italy, Spain and Portugal. The two sides also agreed during the talks to give fresh impetus to Beijing’s efforts to attain full market economy status (MES) for China in the European Union, according to a joint communique issued after the summit.

“China is ready to increase its participation in resolving the EU debt problems,” the Chinese premier told journalists after meeting EU president Herman Van Rompuy and European Commission president Jose Manuel Barroso. China was considering using Europe’s bail-out funds to help address the continent’s fiscal woes, Wen added, without elaborating further on how the Asian power might be prepared to contribute.

China has made clear its growing concerns over the crisis in Europe, repeatedly urging EU leaders to get a grip on the situation, which the foreign ministry said this week had reached a “critical juncture”.

European leaders last year approached China, which holds the world’s largest foreign exchange reserves, to invest in a bail-out fund to rescue debt-stricken states.

EU leaders will discuss in March whether to boost the size of the 500 billion euro European Stability Mechanism (ESM), the permanent rescue fund due to begin operating in July. Van Rompuy said he welcomed “the readiness of China to cooperate with the European Union in order to ensure the financial stability of the eurozone. “We have not just navigated a difficult bend, but we have turned a corner,” he added.

Leaders of the 17-nation eurozone and eight other EU nations agreed last month to create a new fiscal pact requiring signatories to put balanced budgets into law. But Moody’s this week questioned whether Europe was pulling together adequate resources to deal with the crisis.