Europe joins fight in financial storm

PARIS – The leaders of Europe’s four main economic powers vowed on Saturday to protect fragile banks in their fight against the global credit crisis as the biggest rescue in German financial history collapsed.

France, Germany, Britain and Italy put on a united front, promising a more co-ordinated approach to the credit crunch, although Germany’s Chancellor Angela Merkel insisted states would mainly act individually. President Nicolas Sarkozy, who hosted Merkel and prime ministers Gordon Brown of Britain and Silvio Berlusconi of Italy, did not dispute this point, but said a new “doctrine” had been agreed.Sarkozy said the four had agreed to punish failing bank executives and to call for a rapid meeting of the Group of Eight world industrialised powers to marshall a global response to the financial crisis.The scale of the financial storm was brought home when, during the summit, the German bank Hypo Real Estate (HRE) announced that a planned 35-billion-euro (48-billion-dollar) buy-out had collapsed.A consortium of banks was to have led the biggest rescue in German history and its failure could wreak havoc when financial markets reopen today.Germany’s Interior Minister Wolfgang Schaeuble has warned that the financial crisis could have political repercussions, noting how Adolf Hitler rose to power after the 1929 Wall Street crash.”The consequences of that depression was Adolf Hitler and, indirectly, World War II and Auschwitz,” the minister was quoted as saying in Der Spiegel’s latest edition to appear Monday.HRE said in a statement that it was “determining the consequences” after its suitors had “refused to provide liquidity lines”.It was problems like those at HRE, the British banks Northern Rock and Bradford and Bingley, Dutch-Belgian giant Fortis and the Franco-Belgian Dexia that forced Sarkozy to call the mini-summit in Paris.The Belgian government was said to be considering totally nationalising the Belgian part of Fortis or selling assets to BNP Paribas of France.The Dutch government has nationalised Fortis’ Dutch assets.”We have agreed to make a solemn engagement as heads of state and government to support banking and financial institutions faced with the crisis,” Sarkozy said at a joint news conference following the three-hour meeting.”Each government will operate with its own methods and means, but in a coordinated manner.In a way, we have devised a doctrine,” he added.Nampa-APPresident Nicolas Sarkozy, who hosted Merkel and prime ministers Gordon Brown of Britain and Silvio Berlusconi of Italy, did not dispute this point, but said a new “doctrine” had been agreed.Sarkozy said the four had agreed to punish failing bank executives and to call for a rapid meeting of the Group of Eight world industrialised powers to marshall a global response to the financial crisis.The scale of the financial storm was brought home when, during the summit, the German bank Hypo Real Estate (HRE) announced that a planned 35-billion-euro (48-billion-dollar) buy-out had collapsed.A consortium of banks was to have led the biggest rescue in German history and its failure could wreak havoc when financial markets reopen today.Germany’s Interior Minister Wolfgang Schaeuble has warned that the financial crisis could have political repercussions, noting how Adolf Hitler rose to power after the 1929 Wall Street crash.”The consequences of that depression was Adolf Hitler and, indirectly, World War II and Auschwitz,” the minister was quoted as saying in Der Spiegel’s latest edition to appear Monday.HRE said in a statement that it was “determining the consequences” after its suitors had “refused to provide liquidity lines”.It was problems like those at HRE, the British banks Northern Rock and Bradford and Bingley, Dutch-Belgian giant Fortis and the Franco-Belgian Dexia that forced Sarkozy to call the mini-summit in Paris.The Belgian government was said to be considering totally nationalising the Belgian part of Fortis or selling assets to BNP Paribas of France.The Dutch government has nationalised Fortis’ Dutch assets.”We have agreed to make a solemn engagement as heads of state and government to support banking and financial institutions faced with the crisis,” Sarkozy said at a joint news conference following the three-hour meeting.”Each government will operate with its own methods and means, but in a coordinated manner.In a way, we have devised a doctrine,” he added.Nampa-AP