Commission gives nod to German bank guarantee plan
ELITSA VUCHEVA
06.10.2008 @ 18:15 CET
EUOBSERVER / BRUSSELS - The European Commission on Monday (6 October) said Germany's announced plan to guarantee all its bank savings seemed in line with EU competition regulations, adding the situation was different from that of Ireland, which took a similar decision last week.
"The [German] measures seem to be limited to retail bank deposits and so less liable to give rise to distortions of competition," commission spokesperson Jonathan Todd told journalists in Brussels.
Measures announced by Germany are "less liable to give rise to distortions of competition" than a similar Irish plan, says the commission (Photo: European Community)
"In general, retail deposit guarantee schemes for savers can be an appropriate policy response regarding the stability of the banking system," he added.
The comments came after Germany on Sunday vowed to guarantee the deposits of all private savers, in addition to announcing a 50 billion plan to save Hypo Real Estate, the country's second biggest property lender.
Prior to this, a 400-billion plan by the Irish government to guarantee the deposits and debts of six Irish banks had prompted protests from foreign-owned banks operating in Ireland, and from Brussels.
But Mr Todd said that one should differentiate between the German and the Irish measures.
"The thing we are looking at with the Irish measures is their scope because they go beyond retail deposits and the extent to which they may be open to non-Irish banks present on the Irish market," he stressed.
"But our understanding is that the precise details of the measures are still being worked out by the Irish authorities
So, we're not going to reach any definitive opinion until such time as the definitive arrangements are finalised."
Earlier, the bloc's commissioner in charge of competition, Neelie Kroes, had urged Dublin to change parts of its plan to assure it was not in breach of EU rules, adding she had information that this was going to be done.
"My people were in Dublin on Friday and Saturday, and returned with positive news that there will be corrections to the plan. They will correct the discriminatory elements which we don't like," Ms Kroes told Dutch television programme Buitenhof on Sunday (5 October), the Irish Times reported.
"You can't introduce something like that, it is not allowed. And a guarantee without any limits isn't allowed either," she added.