Europe’s markets have responded bullishly after the EU agreed a bumper rescue package to protect the single currency and prevent Greece’s debt crisis from spreading.
Frankfurt, London and Paris all opened up following news EU finance chiefs had agreed a 750 billion euro rescue plan.
Last week, fears of contagion to Europe’s other indebted economies had prompted sharp drops in world stocks.
Speaking in London trader David Buick said: ‘‘Certainly the EU knew that their indecision had cost the market a lot of security, enormous amount of liquidity. We were terribly worried we were going back to 2008 when there was no money around. A decisive action on their part is very well received, not so much the package from the EU which is a backstop, but the fact that the ECB (European Central Bank) is prepared to stand there and buy in bonds, we need to know how much, but it’s such a positive thing for the market”
The package sees 500 billion euros from the EU and 250 billion euros from the IMF.
EU finance chiefs were forced to cobble together the massive bailout following fears the single currency itself was in jeopardy.