Athens - Greece's finance ministry on Friday said that it will guarantee all bank deposits, assuring nervous savers across the southern Mediterranean country that their banks were safe.

National Economy and Finance Minister Giorgos Alogoskoufis said the government was following the Irish lead and taking steps to increase protection afforded to borrowers defaulting on loan payments as higher lending rates squeeze disposable incomes.

"The government is approaching the issue with sensitivity and promoting every feasible measure to help people in a difficult position due to adverse international conditions," he said.

"Greece's banking system is completely safe and solvent and ... citizens' deposits at all banks operating in the country are absolutely guaranteed."

Alogoskoufis on Friday tabled a bill in Parliament which aims to shield Greek borrowers from the impact of the global financial crisis.

The move comes as governments across eastern Europe were forced to issue statements on Thursday assuring depositors that their banks were safe.

Under the bill's provisions, whose details were published in the Greek Kathimerini newspaper, banks will not be allowed to seize from accounts money owed to them by customers, while lenders will not be allowed to repossess homes for debts of less than 20,000 euros (28,000 dollars).

The bill also states that banks will not be allowed to auction off properties at less than their official tax value, a government estimate based on a property's size and location.

Newspaper reports quoted finance ministry sources, saying the government will guarantee all bank deposits in the country, irrespective of amount, just as worried savers were withdrawing savings from banks.

Greek laws currently guarantee deposits of up to 20,000 euros. (dpa)