EU competition commissioner Neelie Kroes (Image © European Communities 2008)

To prevent the collapse of the banking system across the EU’s 27-nation bloc, member states contributed €2.3tn for financial guarantee schemes, €300bn for recapitalisation programmes and €400bn towards other rescue and restructuring schemes/packages.

The announcement came following a special report by EU competition commissioner Neelie Kroes, which shows that the EC has approved 25 national aid packages in 10 EU states since last September.

‘The EU’s tried and tested state aid rules have clearly been part of the solution. Our intervention – and sometimes tough – conditions have prevented member states from falling into the trap of protectionism and exporting their problems to other member states, while allowing [them] to avoid financial meltdown, ’ Ms Kroes said.

‘The responsibility now lies with the financial sector to clean up their balance sheets and restructure to ensure a viable future,’ she added.

The European Commission relaxed its rules for approving state bail-outs in September last year, as many banks in the EU teetered on the edge of collapse.