In an unusually strong statement, the European Union has called American lawmakers to order for failing to reach agreement on a $700 billion plan to shore up foundering financial institutions and markets. "The US must take its responsibility in this situation, must show statesmanship for the sake of their own companies and for the sake of the world," European Commission spokesman Joseph Laitenberger told journalists.
The statement came after the US House of Representatives narrowly rejected the bailout plan on Monday, September 29.
Bildunterschrift: The bailout failure was dramatic -- and potentially devastating Much of the world, as well as the Bush administration, had assumed that representatives would pass the package.
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Europe as an example? Bildunterschrift: Großansicht des Bildes mit der Bildunterschrift: Laitenberger said Washington needs to get its act together Laitenberger drew a contrast between the lack of a US response and moves taken by European authorities.
"The system is coping, and therefore we can also have confidence that it comes up with the right answer," Laitenberger said.
On Tuesday, the governments of France, Belgium and Luxemburg announced a 6.4-billion-euro ($9.2 billion) financial injection to support Dexia, a retail bank with some 5.5 million customers. As part of the deal, two bosses of that institution stepped down from their posts.
Bildunterschrift: Großansicht des Bildes mit der Bildunterschrift: Dexia became the latest European victim of the financial crisis "All the necessary measures will be taken to preserve the interests of Dexia's depositors," Belgian Prime Minister Yves Leterme said. "Our ambition was to have very strong political involvement in order to send a signal to the markets."
The Dexia bailout came just hours after the Netherlands, Belgium and Luxemburg agreed to partially nationalize banking giant Fortis, supplying some 11.2 billion euros ($16 billion). French President Nicolas Sarkozy has also been busy urging top banks to keep credit lines open to the French economy.
Markets on a knife edge Bildunterschrift: Großansicht des Bildes mit der Bildunterschrift: Markets all over the globe are jittery The Dexia bailout became necessary after the bank's stock plummeted nearly 30 percent on Monday, reaching an all-time low.
And Tuesday was another roller-coaster ride for European stock market brokers.
All the major European indexes opened with dramatic losses, as investors expressed their disappointment at the US failure to agree upon the bailout plan.
But many markets rebounded during the course of the day amidst hope that US lawmakers would ultimately be forced to intervene to stop the crisis.
The Dow Jones dropped 777 points of Monday -- the biggest one-day loss in the market's history. But in Europe on Tuesday, most analysts were confident that European indexes could avoid a likewise precipitous plunge.
(Deutsche Welle)
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