BERLIN — Like soldiers falling into step, governments across Europe offered up a series of sweeping bailout plans for their banking systems Monday, pushing past $2 trillion the amount of taxpayer money that has been pledged to shore up the continent's floundering financial sector.
Markets responded positively to the news, with stock exchanges gaining back some of the ground lost in last week's selling binge. The bourses in Paris and Frankfurt, Germany, both closed up more than 11%, while London's index climbed more than 8%.
The rescue packages announced by the leaders of Germany, France and other European nations combine massive infusions of capital with guarantees for short-term loans. The rolling wave of bailout announcements was the continent's first coordinated response to the global financial crisis after days of squabbling and dizzying drops in global markets.
"The time of going it alone is, fortunately, over," French President Nicolas Sarkozy declared. Though the proposed bailouts are not guaranteed success in restoring investor confidence, "the highest risk in our times would be not to dare," Sarkozy said.
The combined rescue packages of France and Germany, continental Europe's two largest economies, exceed $1 trillion, far more than the $700-billion package approved by the United States nearly two weeks ago.
Sarkozy said France would make as much as $490 billion in state funds available to keep the country's banks afloat, including $54 billion for capital injections.
In Berlin, German Chancellor Angela Merkel proposed a $653-billion bailout package, the largest emergency program in Germany's postwar history and more than 1 1/2 times the government's entire 2008 budget. Under the plan, likely to be passed by Parliament this week, $109 billion would be earmarked for recapitalizing the banks, and the remainder would take the form of loan guarantees.
Merkel called the package the "first piece in rebuilding" the health of Germany's financial system, which has been paralyzed by a lack of liquidity for some banks and an unwillingness by others to lend for fear of not being paid back.
"The measures we have taken have one objective: They shall help build new confidence," Merkel said "Confidence between the banks, confidence in the economy, confidence of citizens. Confidence is the currency that is valid."
