As European banks and financial institutions wrestle with some of the worst economic conditions in living memory, think tanks are working overtime to try to come up with a solution to the crisis.
At the Centre for European Policy Studies, Daniel Gros says Europe is different and cannot follow a United States-style rescue plan. “In Europe we certainly need a plan for the European banking system,” he said. “We don’t need the Paulson plan, we need a different approach in Europe.
“But the key thing to realise is that in Europe we can no longer go ahead with these national approaches, saving one bank in one country one day and another bank in another country the next day. We need a concerted European approach which allows us to save the entire European banking system.”
While Gros believes individual savings are protected, that does not mean jobs are safe. He said: “The individual saver actually has little to fear because household deposits are quite well insured, in the European Union, almost everywhere. But the real risk for the saver is that he or she loses their job… because if the banking system goes down, the entire economy goes down with it.”