Stock markets had their best day in more than two years after six of the world’s richest central banks announced a coordinated effort to push more dollars into the financial system.
By increasing liquidity the unilateral move boosted confidence but was seen as an act of desperation to help those banks with exposure to governments in the euro zone.
With political leadership still arguing over how to stem the single currency crisis the bank action took the pressure off ministers meeting in Brussels for a while.
“The EU is going through a very difficult and I would add a dangerous period, no doubt about that. Since the summer, it’s no longer a problem in this or that country. The trouble has become systemic,” warned European Council President, Herman Van Rompuy .
In Brussels the pressure to protect the vulnerable members of the euro zone has become intense with many urging the IMF to step in. Germany however is still insisting the zone’s weakest members have to reform.
Meanwhile despite Greece being granted its latest bailout tranche yesterday, the new government is set to face its first serious test against union opposition in the form of another general strike.