PARIS — European leaders agreed Sunday on a coordinated rescue plan to guarantee inter-bank lending, inject cash into the banking sector and take other measures to beat back the crisis caused by the global financial meltdown.
At an emergency summit in Paris on Sunday evening, the leaders of the 15 nations that use the euro currency announced a Europe-wide plan to guide and coordinate packages that will be announced by national governments starting today.
The leaders pledged to work together to prop up banks whose credit activities have been all but frozen in recent days, trying to send a strong message of unity and action before financial markets open today.
The package follows a major British initiative, announced last week, to commit about $87 billion for a partial nationalization of the banking sector. On Friday, U.S. Treasury Secretary Henry M. Paulson unveiled a similar plan to take direct stakes in banks and other financial institutions using a portion of the $700-billion financial bailout package aimed at buying distressed mortgage-backed securities.
Asian stocks and U.S. index futures advanced in early trading today on news of the parallel approaches taken by the U.S. and European nations. Investors are eager to see cooperation because even if markets perceive that the situation with European banks is improving, those institutions are so closely linked to their U.S. counterparts that continued pessimism about American banks could undermine European governments' efforts.
The actions come on the heels of meetings in Washington over the weekend of leaders of the world's top economies. The so-called Group of 7 had embraced no coordinated effort to stem the global financial crisis leading into the meetings beyond jointly cutting interest rates Wednesday.
Given the differences in European economies and politics, most experts had viewed a large-scale one-size-fits-all approach as impossible and perhaps even undesirable. Because few details of the programs were disclosed, just how similar the plans are was unclear Sunday night.
The European leaders did not put a price tag on the bailout, saying the numbers would be announced in coming days as national governments unveiled details of their efforts. The 27 member states of the European Union -- 12 of which have not adopted the euro -- will consider the proposal at a summit Wednesday in Brussels.
