Europe Economy

FTSE, DAX, CAC Seen Higher Ahead of EU Meeting

European stocks were expected to make solid gains at the open on Friday ahead of a meeting of euro zone finance ministers and US Treasury Secretary Tim Geithner in Poland.

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The FTSE was seen adding 58 points, the DAX was predicted 67 points higher and the CAC was indicated 34 points up.

Hopes are high that the meeting will deliver some kind of big policy move to help tackle the euro zone debt crisis following the co-coordinated action by five of the world’s top central banks to help ease funding concerns for the European banking sector.

Stocks in Asia are finishing the week in positive territory following solid gains on Wall Street on Thursday after the coordinated central bank action. The euro was flat in overnight trade after rising on Thursday.

Friday’s meeting of euro zone finance ministers in Poland is expected to see US Treasury Secretary Tim Geithner push for leveraging of the European Financial Stability Fund, according to Reuters. The move, if agreed upon, could allow the EFSF to credibly ring-fence funds to support the Italian and Spanish bond markets.

Ahead of that meeting Christine Lagarde, the managing director of the IMFtold CNBC she welcomed the coordinated action from the ECB and others while again calling for Europe’s banks to be recapitalized.

The former French finance minister also warning Greece must now deliver. “If there has been no implementation, we don't pay,” Lagarde said.

Before the meeting, Poland's Finance Minister told CNBC in an interview that a breakup of the euro might lead to war over the long term, as it would entail the dissolution of the European Union, which has guaranteed peace and prosperity on the continent

The banking community will be keeping a close eye on UBS following the arrest of one of its traders for allegedly losing $2 billion by carrying out unauthorized trades.

Police in London say the man, reported to be 31 year old Kweku Adoboli, had been arrested on suspicion of fraud. UBS stock fell more than 10 percent on Thursday when all its rivals had rallied sharply .