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BUS9Business/Diplomacy/EconomyEU should save all vital financial institutions: ministersLuxembourg, Oct 7 DPA The European Union EU should save all "financial institutions that are vital to the system" and adopt common principles on how to do it, the finance ministers of the 15 countries which use the euro agreed Monday. But on a day of precipitous stock-market falls, they did not reveal how such "vital" banks are to be defined, simply saying that governments should have the right to intervene in the management of failing institutions - including in the question of managers' pay. The finance ministers of the Eurogroup shared "a common determination" to make sure that "financial institutions which are vital to the system" do not go bankrupt, the chairman of the group, Luxembourg Prime Minister Jean-Claude Juncker said after the meeting. They further agreed that national governments that bail out failing banks should make sure their interventions are temporary and "in the interest of taxpayers" and do not distort competition. And they agreed that each member state should have the right to change the management of failing institutions, including in the vexed question of executive pay, he said. "There has to be a necessarily national approach, which has to unfold in a framework of solidarity ... We have no other choice, we're not a federation," he said. The monthly meeting of the Eurogroup, a day before the regular meeting of the finance ministers of the EU's 27 member states, came at the end of a day of high drama on European markets. Stock exchanges in Paris, London and Berlin all registered massive falls, with the Paris Bourse falling over 9 percent to register the greatest single day's loss in its history. By the end of the day, the heads of state and government of the EU's 27 member states in an unprecedented move issued a joint statement on the crisis, pledging to take "all the necessary steps" to ensure financial stability. Such measures would include the injection of liquidity by European central banks, bail-outs for troubled banks and guarantees for deposits, the joint statement said. Following on from that announcement, the first concern of the Eurogroup meeting was to restore confidence in a system that successive injections of government money have not yet calmed. The European Central Bank ECB "was among the first to analyse the fact that we had an under-estimation of risk before the turbulence. Now we're in a moment when the pendulum has probably gone too far the other way," ECB chief Jean-Claude Trichet said. The Eurogroup also moved to dispel fears that the crisis would prompt governments to abandon the principles of the EU's Stability and Growth Pact, which sets strict rules for how much money governments can borrow and spend in a bid to maintain stability. The pact "has room to manoeuvre. The rules are precisely established, all you have to do is apply them," EU Economic and Monetary Commissioner Joaquin Almunia said. He said that the EU's executive, the European Commission, will shortly propose lifting the minimum amount of savings European states guarantee above the current 20,000-euro $27,500 level - a move which some member states have already taken themselves. "We absolutely have to avoid the consequences of unilateral action, which has caused more than a few problems for some member states. We absolutely have to put the brakes on that risk," he said. But serious questions remained over how the EU's member states could coordinate their actions when financial issues are the jealously regarded prerogative of national governments. "What concerns me is that I see different ceilings applied across Europe as to the amount of money to which the guarantee applies, and I also see a different base applied - in one country it includes wholesale funding, in another it's only savings deposits," Dutch Finance Minister Wouter Bos said. The finance ministers of the EU's 27 member states are set to return to the question Tuesday.--DPAsnb711 Words07100615