Europe Urges Quick Action On Bailout

There's growing criticism in Europe over the failure of the U.S. Congress to pass measures to stabilize the financial markets. Meanwhile, European governments were forced to take more steps to rescue banks and stabilize markets on Tuesday.

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Leaders in Europe have reacted with shock to the House's failure to pass the bailout plan. They're calling for Congress to pass some kind of stabilizing measure later this week. And today, European governments were forced to take more steps to rescue banks and stabilize markets. NPR's Rob Gifford reports from London.

ROB GIFFORD: If the U.S. is divided on last night's vote, Europe feels much more united in its response to the Congress men and women who voted against the bailout plan, summed up rather bluntly by European Union Trade commissioner Peter Mandelson.

Mr. PETER MANDELSON (Commissioner, European Union Trade): I feel they've taken leave of their senses and I hope that in Europe, we will not see politicians and parliamentarians replicating this sort of irresponsibility and political partisanship that we have seen in Washington.

GIFFORD: That tone towards the United States of 'you started all this so you must stop it' was echoed somewhat more diplomatically by German Chancellor Angela Merkel.

Chancellor ANGELA MERKEL (Germany): (Through Translator) The German federal government expects, and I also expect, that the rescue package in the United States will be approved this week. This is a condition for creating new confidence in the markets. And that is of incredibly great significance.

GIFFORD: And no wonder there was such a sense of urgency. After the partial nationalization of Belgian giant Fortis yesterday, a second bank - Dexia - had to be bailed out today by the Belgian, French, and Luxembourg governments. And France itself, often seen as more insulated from global financial turbulence than some of its neighbors, Henri de Castries, the head of the huge French insurance group AXA, called for calm.

Mr. HENRI DE CASTRIES (President, AXA Insurance): (Through Translator) The French finance system is a stable system that is very solvent. And I think that at times like this, there's no need to panic. Appropriate measures have been taken.

GIFFORD: There was no telling that to traders on the Russian stock market, though. Trading was suspended again today after stocks fell by record levels, but markets reopened later and shares rallied a little as they did across Europe. In Ireland, the government has taken the unprecedented step of guaranteeing deposits and borrowing at six major banks against any potential collapse. The move came after the Irish stock exchange suffered its greatest fall in history yesterday. Even so, European analysts and economists like Helge Berger of the Free University of Berlin, say the continent's problems are far from over.

Mr. HELGE BERGER (European Economic Analyst): No, I don't think it stops now. I think it will continue to go further and I think at this stage, nobody will give you a guarantee that this is it. No, it can't continue even though - nobody really knows from where the next bad news will come.

GIFFORD: This evening, British Prime Minister Gordon Brown showed what a fine line European politicians like their U.S. counterparts are walking, he tried to reassure the British public that its money was safe while trying not to promise explicitly to bail out every ailing bank, or give blanket guarantees like the Irish government has done.

Prime Minister GORDON BROWN (Great Britain): Let's remember that the Irish are dealing with taxpayers' money here. We have got to get what is right and what is also reasonable. And of course, we look at every intervention that is necessary to take. But I think people can see from our actions so far that depositors have been protected - no U.K. depositor has actually lost money.

GIFFORD: As some analysts have pointed out, it's easier at the moment for European leaders to say that Congress should have passed the bailout last night, because they're not facing an election in November. Rob Gifford, NPR News London.

BLOCK: And what's next for the ailing U.S. economy? You can read the views of three economists on that question at npr.org.

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