German chancellor Angela Merkel will not back down on opposing the breaking of EU bank rescue rules as the Italian banking crisis continues.
When asked about plans to rescue the banking sector, the German finance ministry spokesperson, Martin Jäger, said Germany stands by its position that was declared last week at the EU Council meeting, the Financial Times reported.
“We wrote the rules for the credit system, we cannot change them every two years,” the chancellor said in Brussels last week.
The response comes after reports that Italy was ready to ignore the rules and support the banking system with billions of euros if it comes under further pressure.
Last week the European Commission extended a lifeline to Italy's banks by granting a guarantee scheme.
The scheme will allow Italy to use government guarantees to create a precautionary liquidity support programme for banks in need, although it only applies to institutions which are solvent and will only be valid until the end of the year.