Germany boosts rescue plan for sagging economy - East Valley Tribune: Business

Germany boosts rescue plan for sagging economy

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Posted: Sunday, October 5, 2008 9:18 pm | Updated: 8:46 pm, Fri Oct 7, 2011.

Germany on Sunday guaranteed all private bank accounts and negotiated a $69 billion bailout deal for Hypo Real Estate AG as Europe’s second largest economy sought to ward off financial crisis.

The Finance Ministry and private banks reached a deal late Sunday to infuse an additional line of credit worth up to $21 billion into the embattled real estate giant, expanding on an earlier $48 billion bailout plan that would have found the government and private banks splitting the bill.

The earlier deal fell apart Saturday when Hypo announced that a consortium of unnamed financial institutions had backed out. That prompted banking executives and lawmakers to convene in the capital for feverish talks toward the new deal they unveiled late Sunday.

The new package includes the original $48.4 billion plan with the government paying up to $37 billion of that sum and banks funding the remainder as a line of credit.

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