(BRUSSELS) - the European Commission said Monday that Germany's guarantee of all its bank savings seemed in line with EU competition rules and did not pose the same problems as a similar announcement by Ireland.

"The commission notes that the measures seem to be limited to retail bank deposits, so (it is) less liable to give rise to distortion of competition," said Jonathan Todd, spokesman for EU Competition Commissioner Neelie Kroes.

"In general, retail deposit guarantee schemes can be an appropriate policy response to fears regarding the stability of the financial system," he added.

In contrast, the Irish guarantees coverall all deposits and there is also an issue if they apply to non-Irish banks present in the Irish market, said Todd.

"The precise details of the (Irish) measures are still being discussed by Irish authorities," he said.

The German government offered an unlimited guarantee for all private bank deposits Sunday in a bid to prevent a panic run on banks in Europe's biggest economy.

German Chancellor Angela Merkel pledged: "We tell all savings account holders that your deposits are safe. The federal government assures it."

The conservative leader made the remarks as her government was scrambling to salvage a rescue plan for German bank Hypo Real Estate (HRE).

Merkel had sharply criticised Ireland's go-it-alone plan after crisis talks in Paris Saturday with the leaders of France, Britain and Italy.

"We have already asked the European Commission and the European Central Bank to try to talk to Ireland," she said. "It is important to act in a balanced way and for countries not to cause harm to each other."

Commission officials rejected charges that the EU executive's overseeing role was being disregarded as individual member states scramble to shore up their own troubled institutions.

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