BRUSSELS (Belgium) - THE European Commission gave its approval on Friday to rescue plans drafted by Italy and Finland to help stabilise their national financial markets.

The plans are the latest set of national credit guarantees and capitalisation schemes to be scrutinised by EU regulators, who ensure the measures do not distort competition in the financial sector.

EU Competition Commissioner Neelie Kroes said the two plans would be limited in time and scope and provided sufficient safeguards to ensure fair competition between banks remained intact.

The EU executive office has been fast-tracking its reviews of national bailouts after EU leaders agreed to coordinate rescue measures to calm markets and restore lending between banks and customers.

Italy last month put together a rescue package without a monetary cap to restore financial stability. Rome pledged to earmark state money to guarantee bank deposits of up to 130,000 euro ($162,825) if needed.

Finland introduced a bank guarantee scheme worth 50 billion euro (S$95 billion) which would operate until April next year. -- AFP