Focus on unfreezing credit lending between banks, and coordinate deposit guarantee commitments, Conservative MEP urges
Posted, October 07, 2008 @ 18:00
Focus on unfreezing credit lending between banks, and coordinate deposit guarantee commitments, Conservative MEP urges
ECOFIN and European Council must focus on the primary and immediate issues
Brussels, 7th October 2008 -- The discussions regarding remuneration of executives and the ten-year review of EMU can wait, but all nations must focus on unfreezing credit lending between banks, Jonathan Evans, Conservative economic and monetary affairs spokesman in the European Parliament, said today.
Financial affairs ministers are meeting to discuss the latest turmoil on stock markets, which this morning saw large drops in banks' share prices. Ministers have also agreed an EU-wide deposit guarantee of 50,000 Euros (40,000 pounds) - only half that originally proposed and well below the UK's 50,000 pound guarantee.
Mr Evans has called on the EU ministers to coordinate any efforts to guarantee deposits internationally, and to only focus on the key issue of unfreezing credit lending, rather than discussing other matters that must be raised, but can wait.
He said:
"Ministers should address the primary issue facing capital markets - the freeze on credit lending between banks.
"The USA's 'distressed assets' plan is based upon trying to re-establish confidence between banks, but the latest turmoil on European stock markets - particularly in reaction to banking shares - makes urgent progress on freeing up lending between banks the first and urgent priority.
"There is undoubtedly a time for discussing remuneration of senior business executives and for an EU review of Economic and Monetary Union - but that time is not now.
"There must also be urgent coordination in relation to deposit guarantees from central governments. These now range from unlimited guarantees offered in Ireland, Denmark and Greece, political guarantees in Germany, the 250,000 dollar guarantee in the US and the 50,000 pounds guarantee in the UK.
"The agreement reached today by Ministers will do little to resolve the divergent levels of protection being offered to savers both in the single market and around the world.
"Clear and urgent international coordination in respect of deposit guarantees is long overdue."
ENDS
Contact Jonathan on +32 (0) 2 28 45528, jonathan.evans@europarl.europa.eu
James Holtum, Conservative Press Office, tel:+32 (0) 473 861762; james.holtum@europarl.europa.eu
Gareth Goldsmith, Conservative Press Office, tel: +32 (0) 476 668050; gareth.goldsmith@europarl.europa.eu