London - Arabstoday
Financial markets had a rollercoaster ride yesterday as jittery investors braced themselves for a eurozone rescue plan expected to allow Greece to default on half its debts. The FTSE 100 index plunged nearly 100 points to below the 5,000 mark before a stuttering recovery saw it close 0.4 per cent higher. European markets rallied more strongly. Germany’s Dax closed nearly three per cent higher and France’s Cac-40 was up nearly two per cent.The eurozone turmoil followed reports from Washington of a three trillion-euro bailout scheme understood to have been agreed at talks between G20 finance ministers. Details are expected to be unveiled within days.The plan is believed to involve beefing up the European Financial Stability Facility and an injection of funds into at least 16 of the continent’s banks. This would lead to an orderly default by Greece but allow it to remain in the eurozone in a bid to relieve some of the economic pressure on Spain and Italy. After the weekend talks the IMF sought to reassure markets. Its head Christine Lagarde said there had been a “common diagnosis” and “sense of common purpose”. But analyst Louise Cooper, of BGC Partners, warned of a “deeply uncertain” future. She said: “A sufficiently credible plan will necessitate changes to treaties, laws and, not least, the German constitution. “There will be wobbles and uncertainty at every stage. Voters in each country are unlikely to be keen on the solution.\"