Germany steps up opposition to EU bank rescue fund

BERLIN (Reuters) - Germany stepped up its opposition to any emergency European rescue fund for troubled banks ahead of a summit on the global financial crisis in Paris on Saturday.

German Economy Minister Michael Glos, a member of Chancellor Angela Merkel's conservatives, told Bild am Sonntag newspaper that such an emergency plan for Europe "distracted from the real task."

"It's up to the banks now -- together and among themselves -- to take steps 'under their own steam' to allow mutual trust to flourish again," the paper quoted the minister as saying in a preview of its Sunday edition.

French President Nicolas Sarkozy is hosting the summit with leaders of Germany, Britain and Italy, European Commission President Jose Manuel Barroso, European Central Bank President Jean-Claude Trichet and Jean-Claude Juncker, chairman of the Eurogroup forum of finance ministers.

Trichet and Juncker last week sided with Germany in rejecting any need for a European rescue fund for banks.

Several European government sources had said France floated the idea of a 300 billion euros ( 235 billion pounds) rescue fund, although Paris denied the existence of such a proposal.

"I do not think it can be justified in this situation to ask the state to restore trust that has been gambled away with large-scale debt relief plans financed by tax money," Glos told Bild am Sonntag.

"Highly-paid bank managers who have offered hackneyed economic advice to policymakers must now show that they are worth their money," he added.

Merkel said last week Germany "cannot and will not issue a blank cheque for all banks" and the Finance Ministry said it "completely disagreed" with the idea of a rescue fund.