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Stocks in Europe are expected to follow Asia and Wall Street sharply higher on Tuesday on hopes that European officials are close to agreeing to a plan that will avert a banking crisis and ring-fence Greece’s debt problems.
The FTSE is expected to open 96 points higher on Tuesday to 5185, Germany’s DAX is predicted to be up by 99 points to 5430 and the CAC 40 in France is called 44 points higher at 2904.
On Monday CNBC reported that European Union officials are considering providing seed money for a special-purpose vehicle that would be able to issue bonds and buy up euro zone sovereign debt. CNBC has heard talk of as much as an eight-to-one leverage ratio, depending on how much capital comes from the European Financial Stability Facility (EFSF). Plans for levering the EFSF were described as well advanced. Watch the video here .
The EFSF is a vehicle financed by euro zone members, created last year, that's designed to provide financial assistance to euro zone states suffering economic difficulty.
European Central Bank governing council member Ewald Nowotny said plans to extend the EFSF were being considered but warned that the scale of the extension may not be as high as some had been hoping for.
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