European stocks rise on ECB pledge to action

European stocks have risen today (June 15th) on news the European Central Bank (ECB) is ready to act in support of the eurozone.

President Mario Draghi stated in Frankfurt that the institution is prepared to support the 17-nation bloc's banking system if necessary.

The major benchmarks of the region have been depressed this week on account of record-high debt levels in beleaguered Spain, in addition to the worries surrounding the second Greek election this weekend.

Analysts are concerned the Mediterranean country's electorate will vote in favour of parties that oppose the vital austerity measures Athens put in place to secure bailout money and prevent a default.

If the Greek government opts to remove these budget cuts from its financial plans, many fear further instability within the eurozone starting with Greece being forced to exit the single currency.

The ECB president believes the euro needs stronger foundations, which would require governments to relinquish some of their powers over financial and economic policy to supra-national bodies.

Mr Draghi offered a life raft to the eurozone in the form of help where necessary, but remarked that while the financial authorities are poised to offer their support, now is the time for politicians to take the lead.

His comments follow UK chancellor George Osborne's Mansion House speech yesterday, in which he announced a multi-billion pound stimulus programme designed by the government and the Bank of England for the economy as protection against the eurozone crisis.

Mr Draghi claims he and several other top officials are working on a longer-term plan for the euro and the region's economic policy and their proposals will be unveiled at the next European Union summit at the end of the month.

"The outcome will get to be known pretty soon, in a matter of days," he added.

At 11:50 BST, the German Dax was up 0.9 per cent - or 57.6 points - to an index value of 6196.2 points, while the French Cac 40 rose 1.5 per cent - or 48 points - to 3080.4 points.