Estimates of the cost to the German taxpayer of rescuing banks still varied wildly, with high-end guesses coming in at 400 billion euros. The government said it would announce details of the bailout on Monday. The highest estimate of 400 billion euros ($550 billion) was made by Otto Fricke of the opposition free-market liberal FDP who chairs the Bundestag budget committee, in an interview with a Cologne newspaper, the Koelner Stadt-Anzeiger on Monday, Oct. 13. Members of Chancellor Angela Merkel's Christian Democratic Union (CDU) were tighter in their estimates. They said that if the government's cash injections were lost and all the guarantees were called, the bill would total 250 billion euros. That is roughly the same as Germany's entire annual budget this year of 283.2 billion euros.
The highest estimate of 400 billion euros ($550 billion) was made by Otto Fricke of the opposition free-market liberal FDP who chairs the Bundestag budget committee, in an interview with a Cologne newspaper, the Koelner Stadt-Anzeiger on Monday, Oct. 13.
Members of Chancellor Angela Merkel's Christian Democratic Union (CDU) were tighter in their estimates. They said that if the government's cash injections were lost and all the guarantees were called, the bill would total 250 billion euros.
That is roughly the same as Germany's entire annual budget this year of 283.2 billion euros.
The German government has announced a rescue package for its banks which would include 80 billion euros ($108 billion) in fresh capital and 400 billion euros in loan guarantees, the finance ministry said in a statement. The package assumes that 5 percent of a federal guarantee will ultimately be lost, according to provisions of the legislation leaked Monday to German news agency dpa. The legislation, therefore authorizes the Finance Ministry to borrow funds to the value of the 5 percent -- some 20 billion euros -- to counter-balance that eventuality. Chancellor Angela Merkel was expected to announce Germany's role in the coordinated European rescue at a 3 pm news conference, with her finance minister to issue details half an hour later.
The package assumes that 5 percent of a federal guarantee will ultimately be lost, according to provisions of the legislation leaked Monday to German news agency dpa.
The legislation, therefore authorizes the Finance Ministry to borrow funds to the value of the 5 percent -- some 20 billion euros -- to counter-balance that eventuality.
Chancellor Angela Merkel was expected to announce Germany's role in the coordinated European rescue at a 3 pm news conference, with her finance minister to issue details half an hour later.
