STOCKHOLM, Oct 5: Germany joined Ireland and Greece on Sunday in guaranteeing all private savings accounts, putting Europe’s biggest economy at odds with calls for a unified European response to the global financial meltdown.

The decision came as governments across Europe scrambled to save failing banks, working largely on their own a day after leaders of the continent’s four biggest economies called for tighter regulation and a coordinated response.

Chancellor Angela Merkel said that no citizen should fear for the safety of their investments, speaking to reporters as her government held crisis talks on the collapse of a ballyhooed euro35 billion ($48.4 billion) bailout of Hypo Real Estate AG, the country’s second- biggest property lender.

In Iceland — particularly hard-hit by the credit crunch — government officials and banking chiefs were discussing a possible rescue plan for the country’s overstretched commercial banks.

Belgian Prime Minister Yves Leterme said he aims to find a new owner for troubled bank Fortis NV to restore confidence in the company before the opening of markets on Monday.

Leterme told two media outlets that government officials were going over a takeover bid for Fortis’ Belgian operations. The bank’s Dutch operations were nationalised amid fears they could go insolvent.

British treasury chief Alistair Darling said that he was ready to take “pretty big steps that we wouldn’t take in ordinary times” to help the country in weather the credit crunch.

In the past year the government has acted to nationalise struggling mortgage lenders Northern Rock and Bradford & Bingley.

“The European banking industry is feeling the wind of default blowing from the other side of the Atlantic,” said Axel Pierron, senior vice president at Celent, a Boston, Massachusetts-based financial research and consulting firm.

The erosion has also been seen in overall confidence and concern among investors, politicians and the European public, too.

The leaders of Germany, France, Britain and Italy met Saturday to discuss the growing meltdown which has leapfrogged across the Atlantic from the US to Europe, but shied away from the massive $700 billion (euro506 billion) bailout passed by the US Congress a day earlier that President Bush signed into law.

Their failure to agree an EU-wide plan showcased the divisions in Europe on how to deal with the crisis.

France had suggested a multibillion-euro EU-wide government bailout plan, but backed off after Germany said banks must find their own way out.

Hypo Real Estate said on Saturday that the rescue plan had fallen apart after private lenders withdrew support, a key element to the proposal that had already been approved by the EU earlier this week.

Icelandic banks expanded rapidly after deregulation of the domestic financial market in the 1990s and now have combined foreign liabilities in excess of euro100 billion ($138.34 billion) — dwarfing the tiny country’s gross domestic product of euro14 billion ($19.37 billion.

The government last week took over Iceland’s third-largest bank, Glitnir, a decision that prompted major credit ratings agencies to downgrade both Iceland’s four major banks and its government credit rating.—AP