THE HAGUE, Oct 2, 2008 (AFP) - The Netherlands has proposed to fellow European Union members the creation of national funds to help banks in trouble before they fail, the Dutch finance ministry said Thursday.

'We would like for all countries to be prepared and to put money aside ... for capital injections to financial institutions in need,' spokeswoman Hendrieneke Bolhaar said in The Hague.

Clarifying earlier statements, Bolhaar said the country was suggesting a common plan, so 'that all member states operate along the same line.'

Better coordination was needed, she said, because problems arising when banks fail often affect more than one country.

'We would like to have one plan so we can coordinate and cooperate. We want to be proactive on a European level, so that we don't react only once something bad happens.'

Bolhaar said the plan was proposed last week to the Economic and Financial Committee of the European Union, a group of government officials meeting in preparation for a finance ministers' gathering in Luxembourg next week.

She declined to divulge more information on the proposal, saying: 'We are still discussing the details with other states and partners. We are in intense discussions with other European ministries of finance.'

Dutch Prime Minister Jan Peter Balkenende was also to discuss the idea with French President Nicolas Sarkozy during at a meeting in Paris on Thursday focusing on the global financial crisis.

France, which holds the presidency of the European Union, has been keen to develop a European response to the credit crisis, which began when US banks found themselves dangerously exposed to bad debt, and spread around the world as credit markets choked up.