The Dutch state is to guarantee a total of €200bn for inter-bank loans as part of Europe’s action plan to ease the credit crisis, prime minister Jan Peter Balkenede announced on Monday evening.

Balkenende said the cash will be available within days and is intended to help the financial sector return to normal.
“Nearly all banks, however strong their position, are having trouble with liquidity,” news agency Reuters quotes Balkenende as saying.
The prime minister blames the problem on a lack of confidence. The government is prepared to guarantee a part of the loans between banks and between financial institutions and banks so that the money stream starts running again,” he is quoted as saying.
The guarantee comes on top of a €20bn fund the government announced last week to support healthy financial institutions.