Europe leaders agree on bank rescue plan

PARIS — European leaders agreed today on a coordinated bank rescue plan to guarantee inter-bank lending, inject liquidity into the sector and take other measures to beat back the crisis caused by the global financial meltdown.

At an emergency summit in Paris, the leaders of the 15 nations that use the euro currency announced a Europe-wide plan intended to guide and coordinate rescue packages to be announced at the national level Monday. To send a strong message of unity and action before financial markets open this week, the leaders pledged to work together to prop up banks whose activities have been all but frozen by the crisis.

The leaders did not put a price tag on the bailout, saying the numbers would be announced in coming days as national governments unveil details of individual initiatives and the 27 member states of the European Union consider the proposal at a summit Wednesday in Brussels.

But French President Nicolas Sarkozy, who has used his hard-charging style to push for an aggressive response to the crisis because France holds the rotating EU presidency, declared that the Europeans had come up with an effective and united strategy.

"Instead of tearing us apart, this global crisis has strengthened the necessity of dialogue, understanding and compromise," Sarkozy said. "It's not so easy. We don't have the same traditions. For some we don't share the same currency; we have different regulators. And with this crisis, in a few hours, day and night, we've had to learn and understand each other's problems and find a common solution."

Governments will play a central role, according to a statement by the participants. States will guarantee new bank debt through the end of 2009, provide emergency recapitalization to prevent distressed banks from failing and buy preferred shares in financial institutions. The package appears to be modeled on a major British initiative, announced last week, to commit about $80 billion for a partial nationalization of the banking sector.

The meeting was historic in that it was the first time the heads of state in the 15 nations in the single-currency zone have met since the euro was introduced. British Prime Minister Gordon Brown also attended and voiced support for the effort.

Sarkozy said the accord permits the European Union to overcome one of its inherent problems: It creates a unified, concrete policy while allowing for flexibility to account for differences of economy, laws and culture in the vast continental entity.