European stocks rise on EU recapitalisation agreement
The major European benchmarks have made gains at market open this morning (June 29th), as it has emerged European Union (EU) leaders have agreed on a recapitalisation plan for the eurozone's banks.
According to the BBC, the consensus was reached after 13 hours of talks in Brussels.
EU chief Herman van Rompuy stated the plan is to support struggling banks directly without adding to government debt, while a supervisory body will be created to oversee the 17-nation currency bloc's financial sector.
Officials have revealed the plans may be in place before the end of July.
Mr Rompuy revealed the new growth package early this morning, which is made up of a €10 billion (£8 billion) injection of capital for the European Investment Bank and is expected to raise overall lending capacity by €60 billion.
Furthermore, the initiative will target €60 billion in unused structural funds to help small enterprises and create youth unemployment, while a pilot launch of €4.5 in EU project bonds for infrastructure is also being carried out.
In Brussels, the leaders of debt-addled nations Spain and Italy has been pushing for the eurozone to agree on steps to lower the interest rates both countries have to pay.
These nations are concerned their economies may be shut out of the international markets and forced to seek further assistance.
Their plight was backed by new French prime minister Francois Hollande, who stated: "I'm here to try to find rapid solutions for those countries facing pressure from the market, despite having made huge efforts to balance their budgets."
This additional support may have encouraged German chancellor Angela Merkel to yield, as eurozone leaders have for some time been calling on the region's largest economy to provide more support - a matter that had isolated Ms Merkel from her peers.
At 09:20 BST today, the German Dax was up 2.3 per cent - or 146.9 points - to an index value of 6296.8 points, while the French Cac gained 2.3 per cent to 3123.3 points.
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