World recession fears mount after financial crisis

Governments announced more measures Wednesday to douse the financial storm.
-- The European Commission proposed that minimum state guarantees on bank deposits should be lifted within one year to 100,000 euros (136,000 dollars) from 20,000 euros currently in a new bid to strengthen confidence.
-- Greece announced government cash injections and loan guarantees of 28 billion euros (38.6 billion dollars) for banks.
-- Spanish Prime Minister Jose Luis Rodriguez Zapatero said mergers are likely in the country's banking sector, which has so far escaped the worst of the crisis.
-- Iceland's central bank cut its key interest rate by 3.5 percentage points to 12 percent in a move hurried forward because of the storm that has hit the country's banks and left the country fighting national bankruptcy.
European Union nations have already committed more than 1.8 trillion euros (2.4 billion dollars) to fighting the crisis by buying bank shares and providing loan guarantees to keep credit markets moving.
The United States has a 700 billion dollar rescue plan and the administration announced Tuesday that 250 billion dollars from that would be used to take stakes in nine major banks.
"This is an essential short-term measure to ensure the viability of America's banking system," President George W. Bush said. Acknowledging misgivings over the move, Bush said the government intervention was "not intended to take over the free market, but to preserve it."