Bank rescues under scrutiny
• Mark Mardell
• 30 Sep 08, 11:56 AM
Until this week many on the European continent thought they might just get a bit of spray on their faces from the financial tsunami that is sweeping through the UK and US economies.
Indeed there was a fair deal of sniffiness about the downside of "Anglo-Saxon" economics.
Although Chancellor Merkel and President Sarkozy might be a lot friendlier towards transatlantic capitalism than some previous French and German leaders, they are still extremely critical of unfettered capitalism.
Now banks in Ireland, Belgium and Germany are all in trouble and the governments concerned are all determined to step in.
The European Commission is looking at whether their rules against state aid are being broken by the hugely expensive Irish rescue plan, the shoring up of Fortis Bank by the governments of Luxembourg, Belgium and the Netherlands, a similar measure in Germany, as well as the British government's plan for Bradford and Bingley.
The commission is stressing that it is not about to suspend its rules and that they are "part of the solution, rather than part of the problem". The reasoning is that they help a quick bail-out and subsequent restructuring.
It would be interesting to know how the commission would rule on the proposed and rejected US measures - criticised by some Republicans as "socialism" - if it were a member country.
It is now clear that next month's summit of the EU prime ministers and presidents will be dominated by the crisis and there will be new, President Sarkozy-inspired plans on the table.