Germany is assuring its citizens that savers’ deposits are safe as another financial institution faces collapse.
The future of the country’s Hypo Real Estate hangs in the balance after a 35 billion euro rescue package was withdrawn.
But Chancellor Angela Merkel’s coalition says there are already guarantees for private savers within the German banking system totalling 568 billion euros.
Merkel said: “The federal governmet will not allow the problems of one single financial institution to become the problem of the whole financial sytem. Therefore urgent discussions are taking place to secure Hypo Real Estate. Furthermore we declare that those, who are responsible for these irresponsible actions, will be called to account.”
Not surprisingly, the financial crisis continues to dominate the newspaper headlines across Europe.
One insider described the Hypo discussions as “a round of poker.”
Angela Merkel has only just returned home from a meeting in Paris with the other EU members of the G8.
There, the decision by the Irish and Greek governments to announce a blanket guarantee of all bank deposits was criticised for threatening to destabilise the economies of other European countries.
The IMF says the Eurozone is facing its first “trial by ordeal”.