(LUXEMBOURG) - European countries struggled Monday to coordinate protection of people's savings in the face of the financial crisis as a growing number rushed to hike bank deposit guarantees in the absence of an EU-wide plan.

"We see too much variety in Europe," lamented Dutch Finance Minister Wouter Bos as he arrived for a meeting in Luxembourg with his eurozone counterparts.

"We risk a race to the bottom, or a race to the top ... I don't think that is in Europe's interest."

He said that European Union finance ministers, who were to meet Wednesday, should reach a "consensus" on deposit guarantees so that there is no doubt about European solidarity.

Currently EU law requires member countries to guarantee deposits up to at least 20,000 euros (27,000 dollars), however levels vary widely across the EU with some countries offering far more.

Two EU officials speaking on condition of anonymity on the sidelines of the Luxembourg meeting said ministers were considering joint plans to lift the minimum European limit.

Ireland faced a wave of criticism from its EU partners last week after it passed a law offering an unlimited state guarantee on deposits at its biggest banks, prompting fears savers from across Europe could soon try to open accounts with them.

In a bid to assure increasingly jittery savers, Germany made an about-face by offering savers unlimited protection on all private bank deposits, despite having criticised Ireland.

German deputy finance minister Joerg Asmussen defended Berlin's move, saying it "differed profoundly" from Ireland's law, which he said was "discriminatory" because it did not cover foreign banks.

"The German move aims to avoid losses for savers. That's not discriminatory," he said.

In Brussels, EU Competition Commissioner Neelie Kroes, who is responsible for ensuring a level playing field between companies in Europe, said that "general gaurantee protection retail deposits can be a legitimate response."

However, she also said: "There must be no discrimination based on nationality."

The German move upped the ante on finance ministers from other EU countries to come up with copy-cat measures in the absence of a Europe-wide approach.

After Germany offered a blanket guarantee on bank deposits on Sunday, Austria, Britain, Denmark, France, Portugal, Spain and Sweden indicated they had similar plans in the works.

"It is important that this guarantee is given to restore confidence in our financial systems," Portuguese Finance Minister Fernando Teixera Dos Santos said.

"The French presidency (of the EU) has brought forward various proposals. We will examine those proposals to see what proposals can command support in Europe," Irish Finance Minister Brian Lenihan said.

Economic and Financial Affairs Council (ECOFIN)

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