European shares were called to open higher on Friday after European leaders agreed at a summit in Brussels to take emergency action to bring down Italy's and Spain's borrowing costs and to create a single banking supervisory body for the euro zone .
The leaders also agreed to allow banks to be recapitalized directly by the currency area's rescue fund without adding to government debt.
The FTSE was called to open 88 points higher at 5581, the DAX was seen opening higher by 115 points at 6264 and the CAC 40 was expected to open 74points higher at 3125.
European Council chairman Herman Van Rompuy said the EU would create a supervisory mechanism involving the European Central Bank by the end of this year, and break the "vicious circle" between banks and sovereign governments.
Asian shares surged following the announcement with Japan’s Nikkei 225 up 1.5 percent passing the 9000 mark for the first time since mid-May.
Merkel returns to Berlin on Friday where she faces a key vote in the country's parliament to approve the euro zone's new permament bailout mechanism. Voting begins at 5 pm CET. The bailout scheme cannot come into effect without German support.
In company news, Britain is expected expose the second scandal involving the country's banks in as many days.Page 1 of 2 | Next Page