European markets enjoyed a sustained surge in early trading thanks to a bigger-than-expected EU bailout of Spain’s ailing banks. It was the country’s banks that led the rally with Bankia – the lender in the eye of the storm – jumping 8 percent. The bounce reversed the downward trend seen on all of Europe’s main trading floors in recent weeks. But how long can it last? Nathalie Pelleras analyst at KBL Richelieu Finance said:
“The markets are reassured short term. There was a lot of expectation this would happen; we were conscious the problem was the debt in the Spanish banking sector so this is the correct path to follow.”
Eurozone finance ministers agreed on Saturday to lend Madrid up to 100 billion euros for its bank rescue fund, more than was thought needed.
However, there is little respite for the eurozone with the coming Greek election threatening another crisis for the single currency.