European stock climbed higher today as finance ministers and central bankers moved to calm investors concerns about the debt crisis.
Markets are expecting news of a significant increase in the value of Europe’s bailout, the European Financial Stability Facility, from €440bn to up to €3 trillion within days.
The European Cental Bank is likely to reintroduce its 12-month lending programme to banks while some council members have also hinted at an interest rate cut as soon as next month.
Germany’s DAX was up 3.7pc, France’s CAC 3.5pc while the FTSE added on 1.4pc.
European bank shares also gained.
Investors are now gearing up for an orderly Greek default with a much bigger bailout fund in place as bondholders and banks are expected to take a significant hit on their exposure to the debt of that country.
EU monetary affairs commissioner Olli Rehn said earlier that talks are underway to increase the value of the EFSF.
He added that there was “increasing political will” among leaders to act swiftly.
At the weekend, US Treasury Secretary Timothy F Geithner warned at the International Monetary Fund weekend meeting that that failure to face the Greenk chaos would lead ”cascading default, bank runs and catastrophic risk.”