EU urges US to approve rescue plan

September 30th, 2008 - 7:32 pm ICT by IANS  

Brussels, Sep 30 (DPA) The European Commission Tuesday urged US lawmakers to assume their responsibilities and swiftly approve a massive rescue plan amid global financial turmoil.”The turmoil that we are facing has originated in the US, and has become a global problem,” said commission spokesman Johannes Laitenberger.

“The US must take its responsibility in this situation and show statesmanship for the sake of their own country and for the sake of the world,” Laitenberger added on behalf of the European Union’s (EU) executive arm.

The appeal came less than a day after the US House of Representatives rejected the $700 billion bail-out plan submitted by US Treasury Secretary Henry Paulson, sending share prices plummeting around the world.

Laitenberger described Monday’s vote as “a disappointment” and said the EU now expected US lawmakers to approve the plan “soon”.

The spokesman said European authorities were responding to the woes facing their own financial institutions, singling out the role of the European Central Bank in pumping liquidity into the continent’s financial markets.

“The last hours have shown once again that European authorities are assuming their responsibilities,” Laitenberger said.

On Monday, Franco-Belgian bank Dexia became the latest victim of the global credit crunch - sparked by last year’s US subprime mortgage crisis - requiring an injection of capital totalling 6.4 billion euros ($9.2 billion) from the governments of France, Belgium and Luxembourg.

The Dexia bail-out came just hours after a similar state intervention was required for Dutch-Belgian insurance and banking giant Fortis.

Meanwhile, the Irish government has moved to guarantee all deposits in Irish banks.

“The commission is supporting the different initiatives that are underway, notably between Belgium, the Netherlands and Luxembourg concerning Dexia bank and the decision by the Irish government to guarantee the deposits with Irish banks,” Laitenberger said.

“This again shows that public authorities in Europe can live up to the task of preserving financial stability and protecting savings,” he added.

French President Nicolas Sarkozy has called an emergency summit to address the crisis while the commission is on the eve of unveiling its own plans to improve the regulation of the financial sector.

The proposals, due to be presented Wednesday by EU Internal Market Commissioner Charlie McCreevy, envisage forcing banks to set aside capital to cover their riskiest activities and improved supervision over banks operating in different European countries.

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