EU Won't Manage Unified Banking Plan

The European Union will not respond with a U.S.-style bailout package to the current crisis but it will probably decide to guarantee all private deposits in banks across its territory to boost citizens' confidence in financial institutions.

Ireland was the first to take such a measure last month, offering a blanket guarantee to all depositors in its banks and prompting a flight of capital to Irish financial institutions as well as the outspoken wrath of neighboring Britain.

Other EU members were forced to follow suit, with richest member Germany guaranteeing all private deposits in its banks, a step which was rapidly imitated by other countries, while others, like Sweden, warned that "one country's solution is another's problem" and called for a common solution to the financial crisis