euro|topics - Common rescue plan rejected

Main focus of Monday, October 6, 2008

Common rescue plan rejected

The heads of state and government from Germany, France, the UK and Italy met on the weekend and rejected a common rescue plan for European banks. While governments are to strengthen their cooperation, each EU country is now to decide for itself what assistance it will provide its banks with. The European press voices dissatisfaction at the outcome of the Paris summit.

Trouw - Netherlands

For the Dutch newspaper Trouw, the EU does not live up to its aspirations as an economic and political power: "The Union has consistently dropped words of appeasement like coordination, responsibility and stability. The four in Paris are firmly determined to save the banks and the citizens' savings, and to free up the financial system so that money may once more start to flow for businesses and investors. But there can be no talk of a common approach. ... Each country is following its own path, and it will be up to EU Commissioner for Competition Neelie Kroes to determine what is permitted and what is not. ... The fact that the leaders of the biggest economic powers of Europe could come up with no common strategy once more demonstrates that the European Union is still far from being the economic and political authority it aspires to be. Time will tell if the carefully constructed economic and monetary union can survive this financial storm." (06/10/2008)

La Repubblica - Italy

The left-leaning Italian newspaper La Repubblica criticises the contrast between the ideal of unity propagated by the French EU presidency and the crude reality of unilateral actions taken by member countries: "After creating a common currency and allowing its banks to become uncontrollable giants through international mergers, the EU must now acknowledge the system's lack of political integration. This leads to petty wars between individual states, such as we are now seeing between Ireland and England. English savers are fleeing to Ireland, which attracts them with new state safeguards on accounts. The four in Paris could not even agree on a common level for state guarantees in the case of bank insolvency. The only thing they could agree to was calling a halt to golden parachutes for bad bankers. At the same time they promised to soften accounting rules, allowing banks to continue putting off revealing the extent of their losses as required." (06/10/2008)

La Vanguardia - Spain

The Spanish daily La Vanguardia voices doubts that Saturday's decision will suffice to avert a crisis in Europe: "One day after the solemn decision made at the mini-summit in Paris to bail out any bank that is plunged into a crisis, German Chancellor Angela Merkel was forced on Sunday to reinforce that message with her announcement that the German state will guarantee all the savings accounts in the country. ... But this public guarantee of private savings will not solve all the problems. The resulting climate and the credit crunch will undoubtedly only lead to a further deterioration in the economy. Following Saturday's mini-summit, the situation in Germany and the credit problems of other countries like Belgium and Italy call for stronger intervention on the part of the government and the European Central Bank to guarantee the liquidity of the banks and the entire economy." (06/10/2008)

Sydsvenska Dagbladet - Sweden

The summit of the four major EU countries at the weekend has cast a shadow over the upcoming meeting of the EU finance ministers. Critics say the results of the ministers' meeting have already been decided upon. Sydsvenska Dagbladet sees this as a sign that the EU needs a new constitution: "The rules now in force are not suitable for a Union with 27 members, and can make the EU sluggish or even paralyse it. That tempts the big countries to introduce their own initiatives. The necessity for simpler rules governing decision making is clear, but after the No in Ireland it is still unsure when such rules can be adopted. ... Even before the parliament comes out with a statement this autumn, rumours are circulating in Sweden that the country's right of self-determination is threatened in different ways [by the Treaty of Lisbon]. As if it were better for the big countries of the EU to make more decisions on their own." (06/10/2008)

» To the complete press review of Monday, October 6, 2008

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