By KUNA,
Brussels : The European Commission announced here Tuesday its approval, under EU state aid rules, a German rescue package intended to stabilise financial markets by providing capital and guarantees to eligible financial institutions.
“The package constitutes an adequate means to remedy a serious disturbance in the German economy,” said the EUs executive body.
EU Competition Commissioner Neelie Kroes said in press statements that “thanks to extensive and fruitful cooperation between the German authorities and the Commission, the German rescue package is an efficient tool to boost market confidence.” On October 14, the German authorities presented the European Commission with a proposal of a package of measures intended to stabilise the financial markets and to address the malfunction of the interbank lending.
The German rescue plan includes a recapitalisation scheme which makes available new capital to banks and insurance companies in exchange for shares, a guarantee scheme covering new issuances of short and medium term debt, and temporary acquisition of assets under the condition that these assets are bought back after 36 months maximum without the state making a loss.