Europe Shares to Rise, Boosted by US Tax Cuts Compromise

European stocks were seen rising on Tuesday, lifted by U.S. President Barack Obama's compromise deal to extend all Bush-era tax cuts for two years.

Sharon Lorimer

European sharesrose on Mondayas oil majors were boosted by strength in crude prices, more than offsetting nerves over the outcome of a euro zone meeting which is expected to outline further plans to contain the debt crisis.

Euro zone finance ministers met to discuss the creation of market for joint European government bondsand a possible increase in the European rescue fund.

Their other European partners join them on Tuesday but investors fear that not much will be decided.

Lorenzo Bini Smaghi, member of the Eurpean Central Bank's executive board, told CNBC European leaders should increase the size of the 750 billion euro ($997.5 million) rescue fund if necessary.

"If needed, it should be increased of course," he said.

But Germany on Monday resisted pressure from the International Monetary Fundto increase the size of the safety net. German Chancellor Angela Merkel also opposed the idea to create European government bonds, saying the EU Treaty does not allow for issuing such bonds.

All eyes will be on Ireland once again on Tuesday with Finance Minister Brian Lenihan expected to announce 6 billion euros in cuts as the country faces up to the Greek-style bailout it received last month from the EU and IMF.

Speculation about which country will need financial assisantance next is still rife. London Stock Exchange chief executive Xavier Rolet said France would be the next country to fall in the euro zone debt crisis, but analysts disagreed.

"I guarantee you France is going to be fine," Ralph Silva, director of SRN told CNBC.

UK monthly industrial production figures for October and German manufacturing orders for October are among economic data due out on Tuesday.