MPs have welcomed the €200bn state guarantee for inter-bank loans announced by prime minister Jan Peter Balkenende on Monday evening.

The coalition Christian Democrat and Labour parties said it is vital that the government tries to restore confidence in the financial markets. The aim of the measure announced last night is to kick-start the flow of cash between banks.
MPs will debate the new measure on Tuesday.
The state guarantee means banks are not taking risks when they lend money to each other.
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 guarantee comes on top of a €20bn fund the government announced last week to support healthy financial institutions.