BERLIN — The German government today assembled a rescue package worth as much as 500 billion euros ($671 billion) to shore up the country's financial system — part of a coordinated European bailout effort.

Finance Ministry spokesman Torsten Albig put the total figure at 500 billion euros. His ministry said the package foresees up to 400 billion euros ($536.7 billion) in guarantees for banks.

On top of that comes up to 80 billion euros ($107.3 billion) to recapitalize banks — allowing the state to take stakes — and 20 billion euros ($26.8 billion) to back up the guarantees.

The money will go into a newly created "financial market stabilization fund." The Finance Ministry said banks will be able to draw on that until the end of 2009.

"We are taking drastic action, no question about it ... so that what we have experienced is not rep1013eated," Chancellor Angela Merkel told reporters.

"Our citizens will be protected by today's package against even stronger effects" from the financial crisis, she said. "If the state had not intervened, the consequences would have been incalculable — above all for our citizens, for savers and for the economy."

The Finance Ministry said that help would be available to German financial institutions as well as German units of foreign banks.

"The precondition is that they be solvent companies," it said. However, "in exceptional cases, needy companies that are relevant to the (financial) system also can be bolstered by the fund ... if this is linked with a clear prospect of restructuring."

Merkel said that banks seeking capital help would have to comply with government-set conditions that could include limits on managers' pay and directions on credit to small and medium-sized companies.

Merkel said she aimed to get the legislation through Germany's two houses of parliament by Friday. The chancellor's right-left "grand coalition" of the country's two biggest parties has a large majority in the lower house and also is strong in the upper house, which represents Germany's 16 states.

"We have today laid the first foundation stone for a new financial market constitution," Merkel told reporters.

She said that it must be followed by new international rules that would, for example, improve the work of rating agencies.

The German package's maximum value of 500 billion euros adds up to about one-fifth of last year's gross domestic product of 2.423 euros trillion ($3.29 trillion).

Merkel said the government may have to defer its aim of delivering a balanced budget in 2011.