London - The British government said Monday it was seeking clarification from Germany as to the nature and extent of the pledge to protect private savings. A government spokesman said Prime Minister Gordon Brown would be speaking to German Chancellor Angela Merkel on the telephone later Monday to hear details of the German plan.
"Our understanding of the situation is that the German government will not be bringing forward legislation for a legally-binding guarantee of bank deposits," said a government spokesman in London.
But he added that it was "really a matter for the German government to explain their position. We have been in the process of seeking clarification from Germany as to what they have committed themselves to," said the spokesman.
The German announcement late Sunday, which was initially understood to mean that Germany would grant wholesale financial protection on all savings, was among factors causing havoc on the London stock market Monday, where the Financial Times Index plunged by more than 6 per cent.
However, markets recovered after it emerged from Germany that the guarantee pledge given to savers by Merkel was primarily of a "political" nature.
