Germany, France unveil banking rescue scheme
German chancellor Angela Merkel outlines German banking plan
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Monday, 13, Oct 2008 02:21
Germany and France have unveiled their own multi-billion banking rescue package along the same lines as the UK bailout.
The German government will provide up to €400 billion (£324.34 billion) in loan guarantees and as much as €80 billion (£62.87 billion) in capital to support the banking system.
Chancellor Angela Merkel said the framework would restore trust in the financial sector.
Ms Merkel also said there will be certain rules put in place and international regulations must be strengthened.
There will be more meetings this week, Ms Merkel added, with heads of European governments meeting again on Wednesday and Thursday.
In addition, the French government is creating a company to make €320 billion (£251.5 billion) available to institutions that have the necessary funds but is adding conditions to the cash, including restrictions on the salaries of top management.
Following meetings of the G7 finance ministers and the heads of several major European economies, a more coordinated approach has been decided, based on the UK scheme.
The US is also reportedly considering taking stakes in banks in return for capitalisation.
Yesterday, Mr Brown evoked the Blitz spirit in an article for the Sunday Mirror.
"I've seen in the cities and towns I've visited a calm, determined British spirit; that, while this is a world financial crisis that has started from America, Britain will lead the way in pulling through," Mr Brown wrote.
"And I know that we will come together as a country and emerge a fairer and more successful nation than ever before. Together, we can win the fight for Britain's future."
The euro has rallied in anticipation of a Europe-wide bailout and was up 1.9 per cent to $1.3657 this morning.