Stocks up on EU debt pledge

European shares rose in early trade on hopes that the French and German leaders' plan to solve the euro zone debt crisis would include recapitalising banks.
Even though Angela Merkel and Nicolas Sarkozy didn't give many details, investors were pleased with the promise.
Frankfurt trader Fidel Helmer says the markets are also relieved France and Belgium are rescuing Dexia.
SOUNDBITE: Fidel Helmer, Trader at Hauck and Aufhaeuser, saying (German):
"It is good news today that the state has come to help the Dexia bank, that solves at least one problem. But it is far from being a major success. A debt haircut in Greece is being expected more and more widely. This will affect banks in a negative way again and European banks, not neccessary German banks, might get into difficulties."
Merkel and Sarkozy met in Berlin on Sunday to discuss the sovereign debt crisis.
They said they're working on a sustainable answer to Greece's problems and would speed up euro zone economic co-ordination by the G20 summit in Cannes at the start of November.
Patrick Armstrong, a Managing Partner at Armstrong Investment, says the deal may have calmed the markets but it won't be enough long-term
SOUNDBITE: Patrick Armstrong, Managing Partner at Armstrong Investment, saying (English):
"I think what they're doing is changing the emphasis on doing everything to stop a default, to putting the banks in position where they can survive a default and not pass contagion on to other banks in this system. And I think that's something that gives them a lot more control because Greece they actually have no control of it meetings its fiscal targets."
And Greece's problems are far from over.
Strikes and protests continue as officials from the troika, the IMF, EU and ECB, conclude their talks with the Greek government about the next bailout installment.
Greek bank stocks plunged by 12% at one point, as Greece's central bank activated its bank rescue fund to save Proton Bank.
The small lender is under investigation for possible violation of the country's money laundering laws.
It's the first bank to seek help from the Financial Stability Fund - which was set up to help Greece's financial institutions survive the debt crisis.
Although analysts say Proton's problems are largely of its own making.
Joanna Partridge, Reuters
be nationalised using the Financial Stability Fund, although
Analysts say Proton's problems are of theitr own making rather than linked to the debt crisis.
the move was due to Proton's own business problems rather than the debt crisis.
Joanna Partridge, Reuters