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Germany readies rescue plan
Sun, Oct 12, 2008
AFP

BERLIN, GERMANY - THE German government was putting the finishing touches on Saturday to a rescue plan that is expected to provide hundreds of billions of euros to shore up banks hit by the global financial crisis.

Finance Minister Peer Steinbrueck announced on Friday that Germany was in the process of finalising measures to support the country's banking sector, which are expected to be revealed before stock markets open on Monday.

The state is expected to guarantee interbank loans for up to several hundred billion euros and bail out banks in exchange for shares in the institution, similar to the partial nationalisation plan announced in Britain this week.

Experts have estimated the cost at between 300 and 400 billion euros (S$802 billion), sources close to the government told the financial newspaper Handelsblatt.

A government spokesman told AFP that details of the plan were not yet finalised and that 'different options are being looked at'.

The German government appears to have made an about-face on the bail-outissue, after being accused early in the financial crisis of going it alone and rejecting, in particular, the idea of joint European action.

Berlin now seems more willing to coordinate with the 14 other countries sharing the euro currency, which are set to hold a crisis summit in Paris on Sunday.

German Chancellor Angela Merkel held a working meeting on Saturday with French President Nicolas Sarkozy, after which the heads of the eurozone's two biggest economies said they were united in seeking a joint European approach to the crisis.

'All decisions, all preparations and all analyses, we're making together,' Mr Sarkozy insisted.

Dr Merkel is expected to unveil the bail-out plan after the eurozone talks on Sunday and it will be put to the German cabinet on Monday, Handelsblatt reported, citing a government source.

'The government's aim is to approve as quickly as possible the necessary laws and help bring some calm to the markets,' the source told the paper.

The government's plan, which must be adopted urgently by parliament, will be presented to lawmakers in the next few days, according to the Der Spiegel weekly news magazine. -- AFP

 

 
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