A massive emergency package to stabilise the euro unleashed a spectacular rally in financial markets even though the deal has left many questions unanswered.
Around Europe the numbers were extraordinary – Madrid up 14.5 percent, Lisbon over 10.5, Paris rose 9.5 percent and the region’s two biggest bourses -London and Frankfurt gained more than five percent.
The deal agreed by EU finance ministers, central bankers and the IMF is much bigger than any previous EU attempt to calm markets.
The details were laid out by euronews business reporter Antoine Julliard.
He explained: “The European Central Bank has bought government bonds of European countries such as Greece, Spain and Portugal and that will allow those countries to continue to borrow money cheaper, as the interest rates will now be lower.
Secondly, there is a one-year refinancing operation which means the commercial banks can now borrow from the European Central Bank, so avoiding an interbank credit crunch – that’s something the ECB has not done for some time.
Finally the third element is an agreement with the world’s largest central banks for an exchange of currencies so that the euro area has access to enough dollars.”
The euro rose as much as three percent and came close to $1.30, but then slipped back.
And some economist remain sceptical on whether the euro zone can hold together over the long term.