THE TELEGRAPH: Gordon Brown is to hold crisis talks with Angela Merkel, the German Chancellor, about the global financial turmoil.
The German Government has announced that it would guarantee all savings in German banks – putting pressure on Britain and other European Governments to follow.
The Stock Exchange plunged by more than five per cent today amid growing financial panic as Government interventions failed to calm investors.
Three more European countries - Sweden, Austria and Denmark - pledged to protect savings in the same way as Germany. Spain was also reported to be considering a similar guarantee.
However, there was confusion over the German scheme after it emerged that the guarantee is a "political pledge" and will not be backed up by new legislation.
Silvio Berlusconi, the Italian Prime Minister, insisted that European countries would act to ensure that savers' deposits were safe. However, it was not clear how this would be delivered on a European-wide basis.
The British Government – which has announced it will only guarantee £50,000 of savings held per person in each bank - still remains cautious about offering a 100 per cent guarantee because of fears over the potential exposure to taxpayers.
However, Mr Brown is under increasing pressure to extend the guarantee and Treasury sources admit that it may have to act if other European countries offer full guarantees. Gordon Brown in Economic Crisis Talks after Markets Meltdown >>> By Robert Winnett | October 6, 2008
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