Stock markets up after EU agrees rescue package

EU finance ministers have agreed a €500 billion (£433 billion) emergency rescue package, designed prevent the Greek debt crisis from spreading to other euro zone nations.

The bail-out came after 11 hours of discussions in Brussels last week as fears grew for other heavily indebted European countries such as Ireland, Spain and Portugal.

The 16 members of the euro zone will have access to €440 billion of loan guarantees and a €60 billion top-up of an existing EU budget fund.

The International Monetary Fund (IMF) has also contributed €250 billion.

Over recent weeks, the debt crisis in Greece sent shares across the world plummeting after fears grew that the crisis would spread to other European countries.

Furthermore, the euro has come under pressure but recovered some of its losses today after rising against the dollar to $1.29.

Commenting on the rescue deal, Economic Affairs Commissioner Olli Rehn said the agreement proved “we shall defend the euro whatever it takes”.

Meanwhile IMF chief Dominique Strauss-Kahn said: “The IMF will play its part, in the interests of the international community, in addressing the current challenges.”

Today, Asian markets reacted strongly to the rescue deal with Japan’s Nikkei 225 up 1.4% at 10,509.93 – just shy of the high of 10,535.86, while Australia’s S&P/ASX 200 gained 1.9% at 4,564.9 – again just short of a high of 4,577.9.

South Korea’s Kospi Composite increased 1.6% and Hong Kong’s Hang Seng Index rose 1.3%.

European stock markets gained between 1.5% and 3% at the start of trading today.

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