Europe to also Back Banks

News just in, Europe leaders have just agreed to also follow Australia’s lead and guarantee new bank debt and once again, use taxpayers money to ensure that distressed lenders can remain profitable. Clearly, they had to do something to ensure that Europe markets remain sound and that the entire world does not slip into a deep recession (some argue we are already there anyway).

The European Emergency summit was chaired by French President Nicolas Sarkozy with 15 other European Financial Powerhouses also attending. Sarkozy stated that “We need concrete measures, we need unity, which is what we achieved. None of our countries acting alone could end this crisis.”

It’s pretty clear that this decision slaps a wet fish in the face of the G7 summit which pretty much did nothing over the weekend than state “we need to stick together.” Thanks, President Bush – that’s a really great strategy, now please inform us how the G7 is going to actually fix the market ?

The European Decision has thrown more light on the joint effort that is required to fix this problem, and the simple truth that the world is far too interconnected now for any one country to try and fix this problem. World Financial Markets got in this together, primarily led by the USA – although not completely. Remember, European Banks were more than happy to buy up USA securities and exposure themselves to more risk in order to get bigger profits. They all had a choice to say no.

However, at least they are doing something.