Eurogroup chief Jean-Claude Juncker said Thursday, Oct.
2 that he was very relieved that the US Senate had adopted a plan to bail out the banking sector.
After the US House of Representatives rejected the bailout bill on Monday, mainly due to conservative representatives concerned about the impact on taxpayers, the Senate passed a revised version late Wednesday. The House of Representatives is expected to hold another vote on the plan on Friday.
The new version includes up to $100 billion in tax break extensions and raises the ceiling on federal insurance for bank deposits.
"I am very relieved that Russia says Europe in new arms race ...
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EU reclaims misspent farm funds ... the Senate hurdle has been passed," Juncker told Deutschland Radio after US senators passed the bill.
Juncker, who is also the prime minister of Luxembourg, called for the US House of Representatives to quickly add its stamp of approval to the legislation.
He said that the US plan would "certainly help calm markets."
Markets still jittery after Senate vote
But Japan's main share index, the Nikkei-225, closed down 1.88 percent, at a three-year low, on worries about the financial crisis, despite the Senate vote. Other Asian markets also took a new hammering amid uncertainty about the next stage of the US package.
In Europe, Frankfurt's Dax index of leading shares opened down by 0.21 percent. London's FTSE-100 index opened very slightly up.
Bildunterschrift: Großansicht des Bildes mit der Bildunterschrift: ECB chief Trichet (l.) and Junker aim to shore up Europe The Bank of Japan injected another 1.6 trillion yen ($15 billion, 10.7 billion euros) into the financial system -- its 12th straight daily injection.
Japan's Finance Minister Shoichi Nakagawa called for new pump-priming measures in addition to a supplementary budget already being discussed as Asia's largest economy teeters on recession.
"The domestic economy is in a very severe situation and it is worsening," Nakagawa told a meeting of his ruling-party faction, according to Jiji Press news agency.
But he added that a similar plan, which some have urged European officials to draw up, was "not necessary in Europe" because the banking sector there was "more stable" in his opinion.
Juncker did however call for European officials to "put in place a more systematic defense strategy" to protect the 27-nation European Union (EU) from banking failures, rather than be satisfied "with case by case reactions."
He said the subject would be discussed Saturday in Paris during a meeting of representatives from Britain, France, Germany and Italy along with European Commission president Jose Manuel Barroso, Juncker himself, and Jean-Claude Trichet, president of the European Central Bank.
Germany, France joust over alleged French plan
Meanwhile, amid calls by the EU Commission on Wednesday for stronger pan-European cooperation to tackle a raging credit crisis that has lashed banks on the continent, France and Germany were at loggerheads over the idea of a US-style bail out for Europe.
Bildunterschrift: Großansicht des Bildes mit der Bildunterschrift: Lagarde denied France had proposed a bail-out plan French Finance Minister Christine Lagarde told German business daily
Handelsblatt that a "European safety net" could be needed to prevent a bank in a smaller EU country from going bankrupt.
"What happens if a smaller EU state is hit by looming bank collapse? Maybe this country does not have the means to save the bank. Therefore the question of a European safety net solution comes up," Lagarde told the paper.
The comments came ahead of a proposed meeting on the financial crisis by the leaders of Europe's four biggest economies in Paris on the weekend. France currently heads the EU's rotating presidency.
News reports quoted a European official, who did not wish to be named, saying that Paris had floated the idea of a 300 billion euro ($440 billion) rescue fund but Lagarde denied the statement from the source in Berlin that her government wanted the huge rescue package. "There is no such a thing," Lagarde told BBC television after being asked about the reported proposal.
Whether there is or was ever a French bail-out plan, Germany was quick to reject the idea regardless.
"Germany does not think much of such a plan," German finance ministry spokesman Torsten Albig told AFP.
Earlier, Chancellor Angela Merkel said Germany "cannot and will not issue a blank check for all banks, regardless of whether they behave in a responsible manner or not."
Barroso calls for more "credibility" in EU efforts
EU Commission President Jose Manuel Barroso said Wednesday Europe needs to "inject credibility" into its efforts to tackle the current financial crisis, as a major US banking bailout hangs in the balance.
Bildunterschrift: Großansicht des Bildes mit der Bildunterschrift: Barroso says EU states have to step up cooperation "We are asking and urging member states for closer cooperation. It is critically important for confidence in the markets," Barroso said.
Barroso said the existing system of regulation, based largely on national governments and regulators, could cope with the current crisis, but the European Union needed to go further in coordinated action to restore full confidence.
"We need a further strengthening of the supervision structures at European level," he told a news conference on Wednesday.
Rebuffing French calls for EU limits on state aid to be suspended or revised in the light of the crisis, Barroso said upholding the competition rules was vital, but the Commission would apply them flexibly.
(Deutsche Welle)
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