German cabinet backs rescue plan
Chancellor Angela Merkel's cabinet approved on Monday a financial rescue package involving a sum of 470 billion euros (644 billion dollars), sources in Berlin said.
The German rescue package for banks assumes that 5 per cent of a federal guarantee will ultimately be lost, according provisions of the legislation leaked Monday to Deutsche Presse-Agentur dpa.
The guarantee will have a maximum volume of 400 billion euros, meaning 20 billion euros is likely to be lost.
The legislation authorizes the Finance Ministry to borrow 20 billion euros to meet that eventuality.
In addition the government will create a 70-billion-euro fund to recapitalize banks and take over tainted assets from them, according to the leaked bill.