By Mark Kleinman Last Updated: 11:35PM BST 04 Oct 2008  Business leaders welcomed the arrival of .Peter Mandelson at the Department for Business, Enterprise and Regulatory Reform Photo: PA  In an exclusive interview with The Sunday Telegraph, Mandelson said unilateral moves by individual countries to guarantee bank deposits were “distorting” efforts to co-ordinate a response to the crash.  Mandelson also hinted that the idea of a European Union-wide bank rescue fund similar to the one approved by the US House of Representatives on Friday night could have merit.  Despite opposition from the German government to a Continent-wide bailout package expressed as the heads of EU countries met in Paris for talks on the crisis, Mandelson said it was important not to close the door on options which could help restore health to the Continent’s banking system.  “We should not reject any policy option out of hand. Reaching premature conclusions about approaches we should reject is as bad as picking up the first idea that comes along,” he said.  “The danger of this crisis is it may spark a new wave of economic nationalism, with each country looking for a 'get out of jail free’ card. People have to realise that selective or national approaches could lead markets to look to parts of the financial system in a distorted way.”  The former EU Trade Commissioner said moves by the governments of Greece and Ireland to guarantee all deposits could hamper efforts to resolve the crisis.  The decisions, he added, were “likely to create distortions because some parts of the EU system are guaranteed and some are not. That might lead you to conclude that you need to cover all parts of the system or none of them. These policy options need to be fully thought through internationally and implemented collectively if we are to avoid an 'every man for himself’ approach.  “The last year has seen the global economy move into an unsustainable position. In the last two weeks it has woken up to the gravity of the situation and the limitations on governments’ ability to reverse the situation. We are all coming to terms with the depth of the crisis.”  During his four years in Brussels, Mandelson struggled to combat rising protectionism within the EU and between it and key trading partners such as China and the US.  “I produced and got adopted a global Europe trading strategy to reduce protectionist pressures that had been mounting over the past four or five years. I leave Europe’s markets more open to trade than I found them and other markets more open to trading with the EU,” he said.  Mandelson’s return to the Cabinet also leaves him with a hefty domestic workload as he battles to restore the confidence of the business community in the Labour administration.  Among his key objectives will be to reassure business leaders – who on Friday broadly welcomed his arrival at the Department for Business, Enterprise and Regulatory Reform – that the corporate tax regime will be put on a more stable footing.  Several large British companies have in recent months announced plans to relocate their tax domicile out of frustration with Government policy.  “I know some of the business leaders who have been moving in this direction and I want to understand why they are taking these steps. I want to establish the facts before I pronounce on this,” said Mandelson.
The global financial crisis risks sparking a new wave of economic nationalism    that would put the brakes on international efforts to reduce cross-border    trade barriers, Peter Mandelson, the new Business Secretary, warned.