"The [German] measures seem to be limited to retail bank deposits and so less liable to give rise to distortions of competition," commission spokesperson Jonathan Todd told journalists in Brussels.
"In general, retail deposit guarantee schemes for savers can be an appropriate policy response regarding the stability of the banking system," he added.
The comments came after Angela Merkel on Sunday vowed to guarantee the deposits of all private savers, in addition to announcing a €50 billion plan to save Hypo Real Estate, the country's second biggest property lender.
Prior to this, a €400-billion plan by the Irish government to guarantee the deposits and debts of six Irish banks had prompted protests from foreign-owned banks operating in Ireland, and from Brussels.
But Mr Todd said that one should differentiate between the German and the Irish measures.
Earlier, the bloc's commissioner in charge of competition, Neelie Kroes, had urged Dublin to change parts of its plan to assure it was not in breach of EU rules, adding she had information that this was going to be done.
"My people were in Dublin on Friday and Saturday, and returned with positive news that there will be corrections to the plan. They will correct the discriminatory elements which we don't like," Ms Kroes told Dutch television programme Buitenhof on Sunday (5 October), the Irish Times reported.
"You can't introduce something like that, it is not allowed. And a guarantee without any limits isn't allowed either," she added.
This seems to throw even more confusion into the pot after Merkel backtracked on her public pronouncement yesterday. We do not know whether the EU approval came before or after Merkel's comments that the plan was only political talk rather than legislative action.
Whatever the outcome of the German rescue plan, it must be driving Gordon Brown nuts, so I can only applaud it, although the extra costs to the taxpayer of all the mobile phones smashing against the walls of No.10 will soon be reaching crisis proportions of its own.
