Europe Economy

European Shares to Open Higher; Libor Scandal Grows

European shares were called to open higher on Monday as sentiment brightened at the start of the third quarter. European leaders agreed to shore up the region’s banks last week and investors turned their attention to the health of the U.S. economy.

A European Union, left, and a Hungarian national flag, fly outside the Magyar Nemzeti Bank, Hungary's central bank, in Budapest.

The FTSE was seen opening higher by 20 points at 5591, the DAX was expected to open up 15 points at 6431, and the CAC40 was seen opening higher by 1 point at 3196.

, is expected to formally announce his resignation from the board on Monday morning, following the scandal reported last week at the bank involving the manipulation of the London interbank offered rate by traders.

The chairman’s intention to resign was reported on Sunday as questions were raised at the weekend over the extent of the scandal.

Barclays Chief Executive Bob Diamond has been summoned to the British parliament’s Treasury Select Committee on Wednesday, to answer questions about what he knew about the interest rate manipulation which led to a £290 million ($453 million) fine from US and UK regulators.

France will lower its economic growth forecasts for this year and next as part of a revised budget the government will present later this week to meet its public deficit targets, finance minister Pierre Moscovici said on Sunday.

The country's national audit office is expected to reveal a shortfall of about 8 billion euros ($10.15 billion) on Monday when it publishes the results of an official review of public finances that new president Francois Hollande ordered, the Journal du Dimanche newspaper reported on Sunday.

France’s GDP growth forecast for 2012 could be no more than 0.4 percent it added, while the country’s growth forecast for 2013 is also expected to be lower.

Euro zone leaders agreed on Friday to inject financial aid directly into stricken banks from next year and intervene on bond markets to support troubled member states, an intervention seen as critical by both Spain and Italy.

They also pledged to create a single banking supervisor for euro zone banks based around the European Central Bank in a first step towards a European banking union.

British Prime Minister David Cameron said he is prepared to consider a referendum on the U.K.'s relationship with Europe.Writing in the Sunday Telegraph, Cameron said he wanted British voters to have a "real choice" on changes in the country's relationship with the European Union (EU), adding that could take place by means of either a referendum or a general election.

The prime minister is coming under increasing pressure from within his own party to commit to a referendum, which risks alienating its pro-Europe Liberal Democrat coalition partners.

Iran announced missile tests on Sunday and threatened to wipe Israel "off the face of the earth" as Europe began enforcing an oil embargo and harsh new sanctions over the country’s nuclear ambitions.

French bank Credit Agricole is in talks to sell its Greek Emporiki Bank unit and has received interest from three local lenders, according to a report in the Financial Times.

The sale is the latest signal French banks are drawing back amid ongoing instability on the euro zone.

And German state-backed lender WestLB was broken up in time to meet an EU-imposed July 1 deadline, with its former owners hoping to draw a line under years of losses and controversy.

Economic data released on Monday includes the latest European Purchase Managers' Index expected at 9:15 a.m.(CET) and the latest monthly European unemployment figures which arrive at 11:00 a..m. (CET).