Angela Merkel pushes for decision on European bank capitalization

Angela Merkel, the German chancellor, met with EU chief Jose Manuel Barrosso on Wednesday. Angela Merkel said her government is ready to help German banks, if necessary.

Yves Logghe/AP
German Chancellor Angela Merkel, left, looks at European Commission President Jose-Manuel Barroso as he speaks during a news conference at the European Commission headquarters in Brussels, Oct. 5. Germany's chancellor said Wednesday that she would support a Europe-wide plan to recapitalize banks if such a move was deemed necessary.

German Chancellor Angela Merkel urged a quick decision on bank capitalization in Europe on Wednesday, saying "time is of the essence" and her government was ready to capitalize its banks if needed.

"I think it is important, if there is a general view that the banks are not sufficiently capitalized for the current market situation, that one does it," she told a news conference in Brussels with European Commission chief Jose Manuel Barroso.

"The German government -- as the finance minister has made very clear in the last two days -- stands ready to implement such a capitalization of the banks if it is needed," Merkel said.

"Time is of the essence, so a decision must be made quickly," said the chancellor.

European finance ministers agreed on Tuesday to safeguard their banks as doubts grew about whether a planned second bailout package for debt-laden Greece would go ahead.

Merkel said it was also important "that the American continent and the Europeans don't talk over each other, but with each other, and its important for the markets of course that the results we come up with are not constantly criticized by each other".

Germany's finance ministry said earlier on Wednesday the country's banks were "pretty well-positioned at the moment" in terms of capital, which had been boosted since the financial crisis.

A government spokesman said it was especially important for Merkel "that banks in Europe have enough capital available, and she strongly welcomes progress in attempts to further regulate highly risky and highly speculative derivatives".

Merkel also said in Brussels that Greece must remain part of the euro zone and have "a chance to get back on its feet" and it was vital that all euro zone parliaments approve the strengthened European Financial Stability Facility, as Germany has now done.

"I hope of course all member states of the euro zone manage to put the EFSF into effect. I think it will be a very important signal to the international financial markets," she said.

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