European leaders in Paris have issued a declaration on restoring liquidity to the financial system as part of an emergency response to the banking crisis.
The leaders of France, Britain, Germany and Italy, alongside the European Commission and the European Central Bank, pledged a series of measures to help shore up confidence in the financial system, but without forming a joint bailout fund.
A €30bn fund will be made immediately available to help small and medium businesses.
The statement also called on the European Commission to be flexible when applying state aid and competition rules.
That move could have implications for the Government's bank guarantee law which is being examined by the Commission to see if it breaks state aid and competition rules.
But, in a veiled reference to Ireland, the declaration also said European leaders of the G8 members would ensure that the cross border effects of national decisions were taken into consideration.
Ireland has been criticised for its bank guarantee scheme since it has seen depositors take their money from European rivals and put them into Irish banks.
IMF chief warns EU must act together
Earlier, the head of the International Monetary Fund has said Europe must adopt a coordinated approach to the current financial crisis and warned individual countries against acting purely in their own interests.
Speaking after a meeting with French President Nicolas Sarkozy, the IMF's Dominique Strauss-Kahn acknowledged it was harder for Europe than the United States to come up with a single response because of the structure of the European Union.
He said the Europe Union was facing its first ‘ordeal by fire’ and must show it was able to respond to a crisis.
Mr Strauss-Kahn said the complexity of the European Union made it even more important to have a coordinated message.
‘I hope that Sarkozy will come out with a message to the Europeans, a message of concerted collective action which is even more necessary in Europe than in the United States because Europe is a more complex construction,’ he said.
Finance ministers from the 15-nation Eurozone are due to meet on Monday in Luxembourg and for the whole 27-nation area on Tuesday.
Mr Strauss-Kahn also said the IMF would be revising down its world economic growth forecasts.
