Europeans scramble to save failing banks
STOCKHOLM, Sweden - Germany became the latest country to move to allay fears about the financial meltdown, enhancing a rescue plan for Hypo Real Estate AG and guaranteeing private bank accounts as European governments scrambled on their own Sunday to save failing banks.
India's Champagne Indage to buy Australian winery for $60 millionChancellor Angela Merkel said that no citizen should fear for the safety of their investments. Hours later, her government announced a new bailout package totaling 50 billion euros ($69 billion) for Hypo Real Estate, Germany's second-biggest commercial property lender.
Hypo said an original euro35 billion ($48 billion) rescue plan fell apart after private lenders withdrew support, a key element to the proposal that had already been approved by the EU.
The deal was on top of the guarantees of private accounts. German Finance Ministry spokesman Torsten Albig said the unlimited guarantee covered some 568 billion euros ($785 billion) in savings and checking accounts as well as time deposits, or CDs.
At the same time, Belgian Prime Minister Yves Leterme said that France's BNP Paribas SA had committed to taking a 75-percent stake in Fortis NV.
Leterme said the Belgian and Luxembourg governments would, in turn, take a blocking minority share in BNP Paribas.
The deal came after two days of closed-door talks between the Paris-based bank, Fortis and government authorities in an effort to restore confidence in the company before markets open Monday.
In Iceland particularly hard-hit by the credit crunch government officials and banking chiefs were discussing a possible rescue plan for the country's overstretched commercial banks.
British treasury chief Alistair Darling said he was ready to take "pretty big steps that we wouldn't take in ordinary times" to help the country weather the credit crunch.
In the past year the government has nationalized struggling mortgage lenders Northern Rock and Bradford & Bingley.
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