Dutch propose 3% GDP for bank rescues

Prime minister Jan Peter Balkenende met with the French and current European Union president Nicolas Sarkozy on Thursday to talk about a European approach to the current financial crisis.

Balkenende has suggested that member states should be willing to put a maximum of 3% of their gross domestic product into banks which threaten to go under, the Telegraaf reports on Thursday afternoon.
‘They [banks] must not fall,’ Balkenende is quoted by the Telegraaf as saying after the meeting. Such a scheme would mean a total payout of some €18bn from the Dutch treasury.
Europe-wide the bail-out would amount to around €380bn, the Telegraaf reports the prime minister as saying.
But Balkenende denied earlier reports that the Netherlands wanted to set up a joint EU emergency fund so that financial assistance to banks can be coordinated.
And news agency Reuters quoted him as saying he opposed the idea of an EU-wide fund.
In parliament on Wednesday, finance minister Wouter Bos appeared to suggest that the Netherlands was seeking support for a coordinated fund worth up to €300bn.
In parliament, where MPs were debating the government’s 2009 spending plans, there was considerable scepticism about the Dutch proposal for a national reserve, says the Financieele Dagblad.
Socialist MP Ewout Irrgang said the plan was a ‘paper construction’ rather than a real fund, the paper says.