BERLIN, (AFP) - European Industry Commissioner Guenter Verheugen defended on Wednesday bank nationalisations to prevent bankruptcies, in an interview with the German daily Hannoversche Allgemeine Zeitung.

If a bank were about to fail, "I would stop at nothing, as unconventional as it might be, even if nationalisation turned out to be the only way to prevent a collapse," Verheugen said.

"When the house is burning, you have to put out the fire," he added.

On Tuesday, Iceland said it had nationalised the country's second biggest bank to avoid a collapse of the entire economy.

Meanwhile, Verheugen also backed the German government's decision to guarantee private bank accounts.

But the European commissioner criticised any attempts to ditch budgetary discipline inscribed in the EU Stability Pact, which he said was already flexible enough.

"We must in no case put the euro in peril" by letting public finance slip out of control, Verheugen warned.

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