Merkel gives cold-shoulder to Berlusconi bank plan

October 7th, 2008 - 7:13 am ICT by IANS  

Berlin, Oct 7 (DPA) German Chancellor Angela Merkel renewed her opposition Monday to Italian Prime Minister Silvio Berlusconi’s proposal for a European fund to help banks in trouble.Closer cooperation between members of the European Union (EU) was needed to bring security to financial markets, the chancellor told a joint press conference ahead of talks in Berlin.

“Every country has to live up to its own responsibilities,” she said, calling for a more coherent approach to the financial crisis which has spilled over to Europe from the US.

Berlusconi spoke in favour of uniform action to deal with what he said had become a difficult situation.

Speaking through an interpreter, he said: “The best way would be if we created an umbrella, a common approach by all European countries.”

Last week he gave a guarantee to Italian savers that they would not lose their money because of the current crisis, the first EU head of government to make such a pledge, Berlusconi said.

Germany followed suit on Sunday with a “political pledge” to guarantee the savings deposits of individuals holding their money with banks in Germany.

It was Berlusconi’s first visit to Berlin since his centre-right alliance, the People of Freedom Party, secured a comfortable majority in both houses of the Italian parliament in elections in April.

The two leaders said they would also use their evening meeting over dinner to discuss Italy’s chairmanship of the Group of Eight leading industrial nations in 2009.

They planned to discuss preparations for the next round of German-Italian government consultations scheduled to take place in Trieste Nov 18.

German government spokesman Ulrich Wilhelm earlier described Berlusconi’s visit as an important one for Merkel.

He said the two leaders had met several times on the fringes of international gatherings but the talks in Berlin would give them an opportunity to examine a whole range of bilateral and international issues in detail.

At their previous meeting at a mini-summit of EU leaders in Paris Saturday, Merkel and Berlusconi differed on the idea of creating a European bank bail-out plan similar to the $700-billion rescue scheme approved by the US.

The chancellor had expressed her opposition to the creation of a common fund worth 3 percent of GDP, preferring instead that countries act on their own to save failing banks.

Berlusconi said Sunday that Italian Economics Minister Giulio Tremonti would resurrect the idea of a bail-out fund at a meeting of EU finance and economics ministers beginning in Luxembourg Monday evening.

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