Merkel confident in passage of U.S. bailout plan

BERLIN, Sept. 30 (Xinhua) -- German Chancellor Angela Merkel said on Tuesday she was confident that the U.S. bailout package would be passed within this week.

Speaking after U.S. congressional rejection of the 700-billion-dollar bailout plan, Merkel said the U.S. package was a "confidence-building measure" that would have "incredibly important meaning" for the economy.

"The German government expects, and I expect, that the rescue package in the United States of America be approved this week," Merkel said in a brief statement.

She said that is "the precondition for creating new confidence on the markets -- and that is of incredibly great significance."

"Working to create confidence is also what guides the German government," she added.

As the financial markets crisis spreads, the Merkel government agreed Sunday to post a guarantee of 26.6 billion euros (around 38billion dollars) for a mortgage lender, Hypo Real Estate (HRE).

German commercial banks are to protect HRE from default with up to 8.5 billion euros.