European Crisis Summit Outlines Plans, Markets Reverse Course

After lengthy deliberations which reportedly lasted well into the evening, European leaders emerged with the outline of a fiscal union designed to maintain the current structure of the EU and the Euro-zone nations which use the Euro as currency.

Left out of the plan was Great Britain, which said it would not succumb to another layer of regulations from the Eu, especially since it still has the British Pound as its sovereign currency.

One highlight was the decision to cap the new permanent rescue fund at 500 billion euros.

Additionally, European central banks will lend 150 billion euros to the International Monetary Fund’s (IMF) general resources. Non-euro EU states will offer around 50 billion euros to the IMF. Having the central banks on board is a new development that was widely cheered by market participants as it should encourage sovereigns outside of europe to pitch in to an IMF fund as well.

Details of the complex plan and new treaty language are expected to be finalized by March, leaving plenty of time for intrigue and dissent in the interim.

Stocks in Europe were higher, with the French, German and UK markets scoring the largest gains. In the US, the effect of the summit was a reversal of the previous day's losses, resulting in a negligible net gain or loss over the two days market players had been anticipating with some anxiety.

So, after all the drama over Thursday's ECB policy meeting and the Friday's EU summit, the end result after two days of nail-biting was a 12-point loss for the Dow Industrials, about two points down on the NASDAQ and a six point loss on the S&P. Indeed, it was all much ado about nothing with the major averages ending the week with marginal gains.

Everyone on and off Wall Street can now get back to doing whatever they do until the next European crisis event, which, if recent history is any guide, should be some time next week.

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