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Merkel insists on national measures to tackle financial crisis

Posted by smeddum on October 12, 2008

Merkel insists on national measures to tackle financial crisis 2008-10-13 04:42:12
PARIS, Oct. 12 (Xinhua) — German Chancellor Angela Merkel put national measures at the core of a European response on Sunday to the financial crisis but called for a more coordinated approach.

Arriving for a first ever summit with her counterparts from the15-nation euro zone, Merkel said the goal of the meeting “is to define a coordinated common procedure for the euro zone that enables us in the next few days to take national steps to stabilize the financial market.” “But measures that do not discriminate against individual member states,” she added.

Germany has been against a proposal to set up Europe-wide bailout fund modeled after the U.S. rescue plan to help troubled banks. Instead, Berlin insisted on coordination of national measures.

The financial crisis, which originated in the United States, has taken its toll on Europe in the latest two weeks.

Despite furious efforts by individual European countries to bail out their troubled banks and the injection of billions of euros into the financial system by the Frankfurt-based ECB, the past week saw the most turbulent days in the history of European markets.

Panic in the markets came partly from lack of a joint European response to the financial crisis. So far, European countries have been fighting the crisis on their own rather than working on a trans-national plan.

Merkel said the summit would give a much-needed boost to the financial markets after a disappointing week.

“I think that the meeting today will send a very important signal to the markets,” she said.

German Finance Ministry spokesman Torsten Albig said Sunday that Berlin was scheduled to announce a massive rescue package to salvage its financial system as early as Monday.

It is reported that the package would be unveiled Sunday evening, which could be more than half the size of the U.S. bailout plan and was similar to the British one.

The British government announced on Oct. 8 a massive rescue plan which would inject 50 billion pounds (about 87 billion U.S. dollars) into its banks and to provide guarantee totaling 250 billion pounds for interbank lending.

Britain has urged other EU countries to follow its suit so as to encourage banks to start lending to each other, but the call has so far received cool response. (1 U.S. dollar = 0.5747 Euro)

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