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Merkel says US bailout needed to restore market confidence

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Merkel says US bailout needed to restore market confidence
Photo: DPA
13:51 CEST+02:00
German Chancellor Angela Merkel said on Tuesday that she expected a stalled US financial rescue package to be passed by lawmakers this week, as it is needed to bring "new confidence" to the markets.

"The government expects and I expect that the rescue package in the United States will be approved this week, because it is needed so that new confidence can be established in the markets," Merkel told reporters.

The comments came after the US House of Representatives narrowly rejected a €700-billion rescue package proposed by Treasury Secretary Henry Paulson to buy from US banks the bad debts at the heart of the current crisis.

The vote hit hopes that the US would be able to get to grips with a snowballing financial crisis that has prompted government-led rescues and nationalisation of banks and insurers on both sides of the Atlantic.

Merkel said that the government-backed bailout of German bank Hypo Real Estate cobbled together in emergency meetings over the weekend was in order to "build confidence ... to give security to the economy and the people."

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