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Europe Stocks Seen Higher; Greek Confidence Vote in Focus

Friday, 4 Nov 2011 | 2:46 AM ET

European stocks were expected to open higher on Friday tracking overnight gains in Asia following news that Greece reversed plans to hold a referendum on euro zone membership and the latest bailout for the country.

Close-up of a pen on stock price chart
Close-up of a pen on stock price chart

The FTSE is called 12 points higher, the DAX in Frankfurt is expected to open up by 22 points and the CAC 40 is called higher by 10 points.

Greek Prime Minister George Papandreou faces a parliamentary confidence vote on Friday.

Sources told Reuters news agency that Papandreou has agreed to step down if his Socialist colleagues back him, making way for a coalition government.

The first day of the G20 summit in Cannes was dominated by the unfolding drama in Greece, with world leaders pressurizing their European counterparts to act swiftly to prevent contagion from the debt crisis in the euro zone.

French President Nicolas Sarkozy took the unprecedented step of warning the Greeks that the priority for European leaders was to preserve the common currency even if that meant Greece fell out of the euro area.

Franco-German pressure made it clear that the struggling southern European nation would not receive further aid unless it sticks to the conditions of the bailout agreement.

The second day of the G20 meeting will reportedly focus on funding for the IMF among other things.

A Reuters report out late on Thursday said the G20 was considering increasing global liquidity by injecting billions of dollars into the International Monetary Fund.

The proposal of a second Special Drawing Rights allocation follows the 2009 decision made by the group of 20 nations to boost the IMF SDR by $250 billion.

Greek Prime Minister George Papandreou was not the only European leader to face pressure from global leaders on Thursday as Silvio Berlusconi's G20 colleagues urged him to execute urgent economic reforms in Italy.

Berlusconi will return home on Friday to face further calls for him to quit and a possible rebellion within his own party over budget plans.

In Spain, another troubled euro zone economy, the ruling Socialist party will face the wrath of the electorate from Friday as campaigning opens ahead of a general election on November 20.

Zapatero's Socialists are largely blamed for the nation's staggering unemployment rate, which currently exceeds 20 percent and they are highly unlikely to win a third term in government according to most opinion polls.

Key corporate releases out on Friday include third quarter results from British bank the Royal Bank of Scotland.

German lender Commerzbank reported a third quarter operating loss on Friday and abandoned its full-year targets due to impairments on Greek assets.

From France telecommunications equipment maker Alcatel Lucent will announce its third quarter figures along with luxury goods producer Hermes International .

Services PMI data from France is out at 8:50 UK time, followed by Germany at 8:55 and the European Union at 9:00.

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Contact Europe: Economy

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