London
08 December 2008
Following on from Asia, European markets surged on the hope that new stimulus plans will help put the brakes on the economic downturn. British Prime Minister Gordon Brown met with French President Nicolas Sarkozy and European Commission leader Jose Manuel Barroso to discuss options before a European summit later this week.
For the first time in many months, the European markets got a reminder of what just a glimmer of optimism felt like.
Spurred by plans unveiled over the weekend by President-elect Barack Obama to create up to 2.5 million jobs in the largest U.S. infrastructure investment plan in half a century the world markets moved up.
Feeding off the upward trend in Asia, European markets all scored big gains at the start of the week.
Energy shares led the rally that also saw banks, automotive and mining stocks advance.
Stimulus packages were the focus of governments in Australia, China, India and in Europe.
In London, British Prime Minister Gordon Brown hosted a meeting at his official residence attended by French President Nicolas Sarkozy and European Commission President Jose Manuel Barroso.
Mr. Brown is a big advocate of using public funds to combat this recession.
"Just as many years ago, investment in road and rail and infrastructure was a powerful stimulus to the economies then, so to in this new age we can invest in the digital infrastructure for the future in telecommunications, in environmentally-related industries and new environmental technologies, in the low carbon industries and services of the future as well as in training and skills," he said. "In other words, to build the technological and environmental infrastructure of the 21st century as we invest out of the downturn.
Barroso's stimulus plan for Europe would come with a price tag of nearly $260 billion. The money would come from national governments, EU budget funds, and from the European Investment Bank.
French President Sarkozy said after the meeting, that success in beating the tough downturn can only come through nations working together.
"The economic crisis is very serious and in Europe we need to act in strong, speedy and coordinated terms," he said. "We fully share the analysis we have just heard of the situation and we are of the view that we need to coordinate the effort, and our efforts in Europe is indispensable even if each of us individually do not use the same tools from the tool kit."
On Thursday and Friday, the 27 European Union leaders will gather at a summit in Brussels to discuss the specifics of that massive stimulus package.