New data on Wednesday showed that the euro zone's inflation rate fell into negative territory in December for the first time since 2009. The figures add yet more pressure on the ECB to launch a U.S. Federal-Reserve-style bond-buying program, and markets surged after the news.
The FTSE 100 lead European markets higher, closing around 0.7 percent up, while the German DAX ended around 0.3 percent higher and the French CAC provisionally closed 0.6 percent higher.
Read MoreEuro zone deflation: Why it matters
Unemployment data also out Wednesday morning showed that Italy's jobless levels rose again in November, hitting a new all-time record. In contrast, Germany's jobless rate fell to another record low last month.
U.S. stocks jumped on Wednesday, with the S&P 500 rebounding from a five-session dive, after data on the labor market beat estimates and investors bet minutes from the Federal Reserve would signal ongoing stimulus.