Crisis cell set up

FINANCIAL ALERT: The EU will agree to set up a "financial crisis cell" today in an effort to prevent the type of unilateral …

FINANCIAL ALERT:The EU will agree to set up a "financial crisis cell" today in an effort to prevent the type of unilateral action taken by the Government to shore up its banking sector, writes Jamie Smyth

The crisis cell will act as an alert mechanism that member states should refer to "at any time" to enable speedy and effective action to be taken in a crisis situation.

The draft outline of the group shows that it will be initially composed of the president of the European Central Bank Jean-Claude Trichet, president of the euro zone Jean-Claude Junker, commission president José Manuel Barroso and French president Nicolas Sarkozy.

"It will ensure smooth co-ordination between those involved and if appropriate will suggest a common response," says the draft conclusions.

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Britain and Denmark both strongly criticised Ireland's unilateral move to guarantee all bank deposits and borrowing fearing the move would lead to a flood of cash from their own banks to Irish banks.