Ministers discuss EU-wide deposit guarantee scheme

EU finance ministers are considering an Irish proposal for a Europe-wide scheme to guarantee private bank deposits of up to €100,000.

The move has been suggested by Finance Minister Brian Lenihan during EU talks in Luxembourg to discuss the global financial crisis.

The European Commission has been calling for a co-ordinated approach to addressing the crisis, but in the absence of any agreement so far, individual governments have been introducing their own measures to calm stock markets and rescue banks from collapse.

Ireland's move to offer a 100% deposit guarantee in Irish-owned institutions has caused anger among some other EU countries.

Last night, EU Competition Commissioner Neelie Kroes warned Mr Lenihan that the terms of the bail-out may have to be watered down to win approval from Brussels.

Speaking in Dublin this morning, Taoiseach Brian Cowen reiterated his defence of the scheme, saying the Government had no choice but to act when it did.

He also said he was happy to co-operate with other countries to build on the decisions that have already been made.