Europe Economy

Europe Stocks Seen Flat; Euro Zone Nears Crisis Deal

European stocks were expected to open higher on Monday following amuch anticipated summit of European leaders on Sunday, where policymakers edged closer to an agreement on recapitalization of the region's banks and details relating to the European Financial Stability Facility.

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Financial spreadbetters expected Britain's FTSE 100 to open 41 to 62 points higher, or as much as 1.1 percent, Germany's DAX to rise 44 to 68 points, or as much as 1.1 percent, and France's CAC 40to gain 22 to 35 points, or as much as 1.1 percent.

In Asia overnight, stocks rose on news of progress from the summit in Brussels, but concerns linger over the extent of losses private holders of Greek government bonds will have to bear.

Final agreements have been delayed until Wednesday, but the disagreement between French President Nicolas Sarkozy and German Chancellor Angela Merkel over the European Financial Stability Facility's relationship with the European Central Bank seems to have been resolved, with Sarkozy backing down on his desire to use unlimited ECB funds for bailout purposes.

Dow Jones reported late on Sunday that there is growing consensus among euro zone leaders that banks will have to take a haircut of around 50 percent on their Greek bond holdings.

An unnamed source said Germany and several other euro zone nations favored haircuts of up to 60 percent, but France with significant assets in Greece, wanted a haircut of around 40 percent.

Dutch bank ABN Amro has promised to buy the financial assets of struggling euro zone banks, the FT reports on Monday.

In an interview, CEO Gerrit Zalm says he has "spoken to almost all" of ABN Amro's European rivals about the plan and the newspaper claims the move is an attempt for the now nationalized Dutch bank to rebuild itself as an international bank.

French President Nicolas Sarkozy is expected to give a TV interview on Monday with French channels TF1 and France 2 on the Brussels summit over the weekend and ahead of the final G20 meeting in Cannes in November.

In London, Members of Parliament are set to vote on whether the UK should hold a referendum on its membership of the European Union in light of the ongoing debt crisis in the euro zone.

All three leaders of the main parties have said they will vote against the motion, which is expected to be supported by many within the right wing of the Conservative Party, the so-called euroskeptics.

Swiss parliamentary elections are also due to take place on Monday.

Key corporate data out of Europe on Monday includes third quarter results for satellite navigation maker Tom Tom and Danish lender Janske Bank will also release its third quarter figures.

German reinsurance giant Munich Re will hold a press meeting at 10:30 UK time on Monday.

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