Greece follows Ireland's lead in savings guarantees

Greek finance minister Giorgos Alogoskoufis said yesterday the Greek government would guarantee its citizens' savings, following the decision of the Irish government to do the same earlier this week.

Alogoskoufis said that "deposits made by citizens in any bank operating in Greece are absolutely guaranteed". He added: "Over the last few days, some people have been influenced by unsubstantiated rumours, and have become nervous about our country's banking system. I reiterate that the Greek banking system is absolutely safe and reliable."

Ireland on Tuesday announced it would guarantee retail, commercial and interbank deposits, covered bonds, and senior and dated subordinated debt at six of its largest banks - an estimated €400 billion of liabilities.

Meawnhile, French president Nicolas Sarkozy said in a speech on September 25: "I will not accept that a single depositor should lose a single euro because a financial institution has become unable to meet its commitments. Savers who put their trust in our banks, insurance companies and financial institutions will not see that trust betrayed... the State will guarantee the security and continuity of the French banking and financial system."

The French government would also intervene to lend to businesses unable to borrow in the private sector, he added.

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