Europe's summit no cure for bank crisis
Pledges made by European leaders to tackle the global financial crisis at their Paris summit on Saturday are insufficient to stop the rot banks are fighting hour by hour, analysts say.
RBS profits up 9 percent"It's like standing on the rails and watching a train coming at you," said Daniel Gros, director of the Centre for European Policy Studies in Brussels.
For Gros and other economists, the leaders of Europe's four largest economies missed an obligation to meet the challenge of the world's worst financial crisis since the 1930s, primarily because they did not propose a system-wide solution.
The leaders of Germany, France, Britain and Italy pledged in Paris to take all steps needed to ensure the stability of the financial system, and to coordinate as necessary.
They asked the European Commission to propose legislation on bank deposit protection and said the exceptional circumstances of the moment meant European limits on state aid to businesses and public deficits should be applied flexibly.
One thing they did not propose was the creation of some kind of pan-European rescue fund, an idea that had circulated in the days before their meeting, but opposed by Germany and Britain.
Nor did they suggest other systemic responses, such as the blanket guarantee Ireland's government is now offering on all retail and wholesale bank deposits, a measure Dublin said was the only way to stop the credit crunch killing banks there.
For full Paris summit statement, click on
The Paris declaration reflected a will to restore confidence but nothing of a fast-acting, hard-hitting or systemic kind to achieve that objective, and certainly not at the speed needed, according to Gros and other economists who work for banks.
"There is once again a wide gap between lofty political aspirations and concrete action," Marco Annunziata, chief economist at Italian bank UniCredit, said.
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