Tensions over state backing for banks surfaced as EU ministers meet to discuss the amount of cash governments can pump into financial institutions to combat recession. The European Commission is under pressure from member states to approve state aid to troubled banks.The EU looks set to pen new rules before the new year. French Finance Minister Christine Lagarde said: “In times of stress and in times of difficulty, we all agreed that it should be sustainable public finance.”
Meanwhile, Christmas is coming, but is the goose getting fat? In Germany shoppers braved the chill wind of recession to shop for Christmas gifts. Retail figures suggest that Germans are still spending, but not as much. Hubertus Pellengahr, a retail analyst, says the real problems are down the line: “The retail industry has not yet been hit by the crisis. We are not worried about Christmas sales, but we are worried about the development next year. We need tax reductions, so that consumption continues, which is what consumers are showing now.” That is a Christmas wish unlikely to be granted as Chancellor Angela Merkel has ruled it out until after the next federal election, due in September 2009.