Sunday, October 05, 2008
The BBC is reporting that the German government has now guaranteed all private savings accounts as they continue to try to find a way to salvage their second largest commercial property bank Hypo Real Estate after a previous rescue attempt failed.
Chancellor Angela Merkel is shown to the right pointing at the piles and piles of money that will be handed out to Hypo depositors on Monday morning.
This follows action by the Irish and Greek in recent days to guarantee savings deposits, actions that have been greeted with scorn by other European nations, up until the time that they take similar actions themselves.
From the BBC:
BBC business editor Robert Peston says the German decision is momentous, and that all other EU countries - including the UK - will almost certainly follow suit.Just ten days ago, citing Anglo-Saxon greed and poor regulation, German finance minister Peer Steinbrueck said the U.S. was in the process of losing its "superpower status" due to the financial crisis that we Americans caused.
"We tell all savings account holders that your deposits are safe. The federal government assures it," Ms Merkel said.
"We will not allow the distress of one financial institution to distress the entire system. For that reason, we are working hard to secure Hypo Real Estate."
Finance Minister Peer Steinbrueck said he was "appalled" that the problems at Hypo had not been revealed earlier.
On Saturday, leaders of the major European economies met in Paris for talks hosted by French President Nicolas Sarkozy.
Britain, Germany, Italy and France all agreed to work together to support financial institutions - but stopped short of agreeing US-style bank bail-out plan.
So the pot says to the kettle...