|
"Macro-economic adjustment programs are tailor-made to the situation of the country concerned and no models or templates are used," he added. Deposits in Europe are guaranteed by a state-backed deposit insurance scheme only up to 100,000 euros ($130,000). The bailout program for Cyprus marks the first time in Europe's three-year-old debt crisis that large deposit holders
-- wealthy savers, business people or institutions -- will be forced to take losses. If holders of large deposits were to start moving their savings away from banks in southern Europe, those lenders could quickly be in need of additional capital, possibly pushing them to seek support from their governments. But nations such as Portugal, Spain, Italy or Greece already have huge public debt loads, which would make it difficult for them to recapitalize their banks. With his comments, the Dutchman, who took the helm of the Eurogroup only in January, also dashed hopes that Europe's rescue fund might one day provide rescue loans directly to banks. The ESM is in theory due to be able to directly prop up ailing lenders once the bloc has moved toward a so-called banking union, including centralized oversight by the European Central Bank, sometime next year at the earliest. That was meant to be a key component of Europe's response to its debt crisis as it would break the link between weak banks dragging down the finances of already heavily indebted governments. "We should aim at a situation where we will never need to even consider direct recapitalization," he told the Financial Times and Reuters. "If we have even more instruments in terms of bail-in ... the need for direct (recapitalizations) will become smaller and smaller," he added. Eurozone nations that have been net contributors to bailout packages -- such as Dijsselbloem's native Netherlands, Germany or Finland
-- have been skeptical about direct bank recapitalizations through Europe's rescue fund, the European Stability Mechanism. They fear their taxpayers' money will be used to bail out banks in other nations whose governments failed to properly oversee their lenders in the first place.
[Associated
Press;
Copyright 2013 The Associated
Press. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
News | Sports | Business | Rural Review | Teaching & Learning | Home and Family | Tourism | Obituaries
Community |
Perspectives
|
Law & Courts |
Leisure Time
|
Spiritual Life |
Health & Fitness |
Teen Scene
Calendar
|
Letters to the Editor