Pressure mounts for EU action on financial crisis

Pressure is rising in Europe for bankers and politicians to follow America’s lead and take similar ambitious action to tackle the world economic crisis.

Individual European governments have proposed solutions on a national basis, and have been criticised for not coordinating their plans.

Germany, in particular, wants far-ranging American-style action.

Josef Ackermann, CEO of Deutsche Bank, said:
“If the United States proposes such a package, Europe, in my view, should be prepared to find similar solutions.”

The bail-out bill dominated this morning’s European headlines, with calls for governments to act, and act soon.

The Financial Times highlighted European incohesion, Liberation said it was “The desperate search for billions!” and Figaro called for teamwork.

Individual actions can have unintended effects. Ireland’s decision to guarantee all bank deposits sparked a cash flight from British institutions to their Irish counterparts, ringing the alarm bells in London.

France has called an emergency summit this weekend to discuss how Europe’s major economies are coping. A rumoured plan for an emergency fund to shore up the system earned scepticism in London, and outright hostility in Berlin, where the Chancellor Angela Merkel said she could not, and would not, simply issue the banks a blank cheque.

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