Thursday, 6 October 2011

Stock markets rise on expectation of eurozone debt plan

EC President Jose Manuel Barroso  
EC President Jose Manuel Barroso has fuelled expectations that Europe is preparing an action plan
Stock markets have been boosted by expectations that European leaders are about to act to ease the debt crisis.
The main markets in London, Frankfurt and Paris were about 2% up, after Hong Kong closed 5.6% higher.
European Commission President Jose Manuel Barroso said in a television interview that there were plans for co-ordinated action to recapitalise banks.
More details of any action plan could come later at a European Central Bank press conference.
There have been a flurry of reports and comments in recent days that European authorities have negotiated plans to bolster banks and boost bailout funds.
On Thursday, Mr Barroso fuelled expectations further, telling Euronews TV that the EU executive was proposing "co-ordinated action" to the 27 European Union nations to bolster banks.
The intention was to "recapitalise banks and get rid of toxic assets they may have".
On Thursday afternoon, European Central Bank president Jean-Claude Trichet will lead a media briefing, which will come after the bank announces its decision on European interest rates.
Then German Chancellor Angela Merkel is due to hold talks in Berlin with Mr Trichet as well as the heads of the International Monetary Fund, the World Bank, the OECD and G20.
On Wednesday, Mrs Merkel said she was in favour of a co-ordinated recapitalisation of European banks if that was deemed necessary.
Expectations that there will be action to bolster banks and boost European bailout funds began on Monday, when Olli Rehn, European commissioner for economic affairs, said there was "an increasingly shared view that we need a concerted, co-ordinated approach".
In an interview with the Financial Times, he said there was "a sense of urgency among ministers and we need to move on".

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