| |
| |
![]() |
| |
|
| |
|
| |
|
PARIS: European leaders were to meet over the weekend in France in the latest bid to forge a common response to the global banking crisis, moving closer to a British-style plan of partial nationalisation.
French President Nicolas Sarkozy and German Chancellor Angela Merkel were to hold talks on Saturday at General Charles de Gaulle's village graveside and then on Sunday the leaders of all 15 eurozone members will gather in Paris.
The heads of the European Union's four biggest economies – Britain, France, Germany and Italy – held a first crisis summit a week ago but Merkel and Sarkozy were split over the need for a common plan.
However, after a week of plunging stock markets and crisis talks on Friday between the finance ministers of the G7 industrial powers, the single-currency bloc has agreed to try once more to coordinate a response.
After the G7 talks in Washington, US Treasury Secretary Henry Paulson said his government was ready to invest directly in banks for the first time since the Great Depression in a bid to restore confidence.
This move followed the decision by Britain's Prime Minister Gordon Brown to guarantee inter-bank lending and to offer to take stakes in some of the country's biggest banks in a programme of partial nationalisation.
Europe, after reluctance in particular from Merkel's Germany, now seems likely to follow London down this route, which bankers hope will restart frozen lending between banks and pump vital liquidity into financial institutions.
France's finance minister, Christine Lagarde, said French banks were relatively well positioned and would not need a government buy-in, but that other European economies might follow the British example.
"It's very likely because European banks are also under-capitalised," she said in an interview with France Info radio on Saturday.
"We have seen Great Britain, which is outside the eurozone, make propositions in this area," she added. "We'll have to see about that in the eurozone, but I suppose it's one of the options."
On Friday, the German daily Die Welt reported that Germany was working on a British-style plan, and a senior European offical told AFP that Brown's idea was a "good one" and would be discussed by the eurozone 15.
"It would be smart to follow the British example at the European level," he said, speaking on condition of anonymity so as not to pre-empt the summit. "I spoke to Madame Merkel and I think she's open to a European decision."
Under the British programme, unveiled on Wednesday, 50 billion pounds (64 billion euros, 87 billion dollars) of taxpayers' money has been made available to buy shares in the country's banks.
Across the Atlantic, Paulson has a 700-billion-dollar pot with which to act since Congress approved his bail-out plan, initially focused on buying out bad loans or so-called "toxic assets" from banks in difficulty.
Under a five-point G7 "action plan" announced on Friday, economic powers will ensure banks "can raise capital from public as well as private sources in sufficient amounts to re-establish confidence".
Merkel and Sarkozy were to meet in Colombey-les-deux-Eglises, the village east of Paris that hosted the famous summit between their predecessors De Gaulle and Konrad Adenauer 50 years earlier, on Saturday afternoon.
The leaders were to give a news conference at 3:00pm (1300 GMT).
On Sunday, Merkel and Sarkozy and their 13 colleagues from the other members of the single-currency bloc will hold a crisis summit in Paris.
Some of the eurozone leaders were annoyed at being locked out of last week's talks, and Spain's Prime Minister Jose Luis Rodriguez Zapatero had called for a full meeting of members on Friday when he visited Sarkozy.
The president of the European Commission Jose Manuel Barroso and the chairman of the European Central Bank Jean-Claude Trichet have also been invited to Sunday's meeting at 5:00pm (1500 GMT) in the Elysee Palace.
- AFP/so
|
