Europe scrambles to save banks from meltdown

PARIS, September 30, 2008 (AFP) – As the shockwave from the US financial meltdown battered Europe on Tuesday, governments scrambled to shore up fragile banks and restore confidence to flighty stock markets.

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In Paris, President Nicolas Sarkozy held a 5:00 am emergency meeting of his top economic team as France, Belgium and Luxembourg agreed to inject 6.4 billion euros (9.2 billion dollars) into the beleaguered bank Dexia.

“Our ambition was to have very strong political involvement in order to send a signal to the markets,” Belgian Prime Minister Yves Leterme told journalists in Brussels after the deal was reached.

Despite their intervention, the failure of US lawmakers to agree on a cash bail-out plan for failing banks panicked Europe’s markets, in the wake of a rout across Asian markets and on Wall Street overnight.

London’s FTSE 100 plunged on opening, briefly recovered and yoyoed between a loss of three percent and a gain of 0.77 in morning trades.

Frankfurt’s DAX 30 slid 2.19 percent to 5,679.67 points on opening and in Paris the CAC 40 tumbled 1.96 percen