Italian cabinet adopts measures protecting bank credit

ROME, Oct. 8 (Xinhua) -- Italian cabinet members met and approved Wednesday night a series of measures aimed at limiting the effects in Italy of the international economic slowdown sparked by the global credit crunch, which grew out of the subprime loan crisis in the United States.

The measures are expected to put into practice a series of guidelines agreed to by European Union's council of economic and finance ministers (EcoFin) to try to curb the global financial crisis, according to Italian News Agency ANSA.

Italian Economic Minister Giulio Tremonti illustrated the guidelines of the measures when he met Wednesday morning with representatives from Italy's industrial and banking sectors.

Attending the meeting were top officials from the Bank of Italy, the Italian Banking Association (ABI), Italy's leading merchant bank Mediobanca and the industrial employers association Confindustria.

The anti-crisis measures are expected to include an extension of state deposit insurance and ways to avoid a short circuit in credit for the economy.

Although EU economic and finance ministers did not agree on a common EU policy, they did decide to waive EU norms and allow state aid to support banks and other financial institutions. Each member state was also to adopt actions to meet the needs of their domestic markets within certain guidelines.

These included that: any aid be temporary; existing shareholders should bear the consequences of government action; taxpayers should be protected; the government can decide changes in management and payment policies in assisted banks; any aid must ensure that a level playing field continues; and no actions should be adopted which have a negative effect on other EU members.

The EU economic and finance ministers also agreed to lift the limit on state deposit insurance in the European Union from 20,000to 50,000 euros. With a ceiling of 103,000 euros, Italy had the high deposit insurance threshold in Europe before the current credit crisis began. Since then Germany, Ireland, Denmark and Greece have moved to guarantee deposits 100 percent.

Italy said Wednesday it was in favor of an extraordinary meeting of the Group of Eight richest nations on the global financial crisis but warned it would take some time to set it up.

Foreign Minister Franco Frattini said he was "not against" an emergency G8 but said "it will take at least a month" to organize.