* ECB's Trichet, Eurogroup's Juncker cold on EU bank fund
* Greek official says Athens will guarantee deposits, Irish
* France announces meeting of European G8 leaders
* Higher Europe-wide deposit guarantees mooted
By Francois Murphy and Marc Jones
PARIS/FRANKFURT The European Central Bank's
chief and the chairman of euro zone finance ministers sided
with Germany on Thursday in rejecting any need for a European
rescue fund for banks suffering from the global financial
France confirmed that President Nicolas Sarkozy would host
a summit on the global financial crisis with leaders of
Germany, Britain and Italy, European Commission President Jose
Manuel Barroso, European Central Bank President Jean-Claude
Trichet and Eurogroup Chairman Jean-Claude Juncker in Paris on
The announcement put an end to uncertainty about a meeting
Paris has pushed for, due to disagreements among the main
European Union governments on the right response to the
deepening credit crunch.
An unnamed senior Greek finance ministry official said the
country would guarantee all deposits at its banks. Such a move
would ignore criticism of a similar move by fellow euro zone
member Ireland, which has attracted criticism from Britain and
Spain as well as misgivings among Brussels' competition
Governments in Germany, Britain, Belgium, the Netherlands
and Luxembourg have ridden to the rescue of banks in the past
week, using state funds to take full or partial control to
restore confidence in ailing lenders such as Fortis FOR.BR
FOR.AS and Bradford & Bingley BB.L.
European officials welcomed the U.S. Senate's approval of a
$700 billion plan to take so-called toxic assets off banks'
balance sheets, but they insisted Europe did not need a similar
programme or was not ready for it institutionally.
"We do not have a federal budget, so the idea that we could
do the same as what is done on the other side of the Atlantic
doesn't fit with the political structure of Europe," the ECB's
Trichet told a news conference.
The bank left its interest rates unchanged on Thursday
although it discussed a cut amid slowing growth and easing
Eurogroup Chairman Juncker said: "I don't see the need for
us to set up a similar programme in Europe." Euro zone and
European Union finance ministers meet on Monday and Tuesday
respectively in Luxembourg.
Several European government sources said France had floated
the idea of a 300 billion euro ($418.4 billion) EU bank rescue
fund ahead of Saturday's meeting, although Paris denied the
existence of such a proposal.
Sarkozy publicly said no EU-wide bailout was in the works
and denied a 300 billion euro fund was under consideration.
British Prime Minister Gordon Brown's spokesman said he did
not expect discussion of an EU-wide bank fund at the meeting.
"The purpose of the meeting will be to discuss how each of
the four major economies in Europe are responding to the global
financial crisis," he said.
French Economy Minister Christine Lagarde has said a
"European safety net" could be needed to prevent a bank in a
smaller EU country from going bankrupt.
But German Chancellor Angela Merkel said Germany "cannot
and will not issue a blank cheque for all banks."
Germany's Finance Ministry said the German government
"completely disagreed" with the idea.
Dutch Prime Minister Jan Peter Balkenende voiced his
opposition to an EU-wide rescue fund, but said national
governments could set aside money to help any troubled banks in
their own countries.
"The (Dutch) plan is for every member state to put aside
money to make a capital injection for their own banks if
necessary. The idea is that it will be some 3 percent of gross
domestic product," he said after talks with Sarkozy in Paris.
Separately, Spain's Economy Ministry said it would support
a coordinated EU effort to raise bank deposit guarantees from
the current Europe-wide minimum of 20,000 euros.
The Irish decision on deposit guarantees posed a challenge
for the rest of Europe in an era where banks are increasingly
cross-border, risking a distortion of competition which EU
rules are meant to prevent.
"Speaking as a Spanish citizen, I think it's a measure that
creates quite a deal of irritation," said Spanish Economy
Minister Pedro Solbes, echoing criticism from Britain, which
has already seen an outflow of cash from its banks to Ireland.
"It appears to be an issue that deserves the full attention
of the European Commission to see whether these rules are
compatible with community legislation."
Greece decided to follow Ireland's example, a senior
finance ministry official said, although Finance Minister
George Alogoskoufis publicly reiterated his faith in the
solidity of Greek banks.
The European Commission said it had not received details
from the Irish authorities of the law passed early on Thursday,
so it could not assess if the measure was in line with the
bloc's state aid rules.
A Commission source said any legal action would be
politically risky at a time when Brussels is trying to persuade
the Irish to reverse their vote against the EU reform treaty,
and would anyway take at least two years to come to court.
Belgian Prime Minister Yves Leterme, meanwhile, said risks
remained for the banking system even after the government's
bailouts of two Belgian-based financial groups -- Fortis and
Italian Economy Minister Giulio Tremonti said global
accounting rules should be discussed at the Paris meeting. A
requirement that companies regularly restate the value of
assets on their balance sheet to reflect changed market prices
has been widely blamed for exacerbating the crisis.
Other possible European responses in the pipeline or on the
table include mandatory regulation of credit ratings agencies
after they were accused of having conflicts of interest and
failing to spot risks in subprime mortgage-based securities.
(Additional reporting by George Hatzidakis and Lefteris
Papadimas in Athens; Darren Ennis, Huw Jones, Antonia van de
Velde and Ingrid Melander in Brussels; Niclas Mika in
Amsterdam; Anna Willard in Paris; Andras Gergely in Dublin and
Deepa Babington in Rome; writing by Paul Taylor and Marcin
Grajewski; editing by Stephen Nisbet)