Global stock markets rise on US Fed stimulus plan.
It followed the Fed’s decision on Thursday to inject $40bn (£25bn) a month into the US economy. But fears over the global economy persisted as the International Monetary Fund and European Central Bank denied they were in bailout talks with Spain. UK, German and French stocks rose 2% in afternoon trading after rises in Asia.
But fears over the global economy persisted as the International Monetary Fund and European Central Bank denied they were in bailout talks with Spain.
Eurogroup finance ministers are meeting in Nicosia in Cyprus for talks on measures to end the current eurozone debt crisis.
On Friday, Jean-Claude Juncker, head of the Eurogroup, announced that the new eurozone rescue fund would be up and running by the end of October.
The European Stability Mechanism (ESM) – originally due to launch in July – would control up to 700bn euros.
The ESM is an essential part of a European Central Bank plan to buy bonds from indebted governments such as Spain and Greece in order to bring down their cost of borrowing. Countries such as Spain would need to make a formal request to the ESM for help before the ECB could intervene.
However, IMF chief Christine Lagarde and an ECB spokesperson strenuously denied reports that they were in talks with Spain about a rescue: “I can assure you we are not,” Ms Lagarde told reporters in Nicosia. Mr Juncker added that there would be no decision on the next steps in Greece’s EU and IMF bailout before the end of October.Credit: BBC/Reuters