EU leaders apply shock therapy for the financial markets

European leaders, gathered in Paris, set up a plan to deal with the financial crisis together. French President, Nicholas Sarkozy declared that the 15 euro zone countries reached an agreement that will deal with all aspects of the problems.

Germany, France, Italy and all others will present on Monday afternoon, in the same time, the details of the safeguarding plan. All decisions agreed on Monday will be efficient by the end of the week, including their legislative translations.

The plan foresees the guarantee of all inter-banking loans and a possible re-capitalization of the banks, in order to prevent important banks from collapsing. Member states can intervene in several ways to sustain the financial systems, by offering guarantees or insurances.

Moreover, the text reads that states can buy negative bank shares in return for state titles. This disposition will come into force by December 2009. The project reiterates the European country’s commitment to prevent any financial collapse that would present a risk for the whole European system.

Belgian Finance minister Didier Reynders declared that all European member states will establish the sum allocated to saving the financial system by Wednesday. At his turn, British PM Gordon Brown declared that the financial system will be on its feet in the next couple of days. Moreover, he added that the decisions taken at the Summit will affect the next three years.