A number of the 15 nations currently using the euro will hold simultaneous cabinet meetings on Monday to enact the measures, said French President Nicolas Sarkozy. The rest of the 27-member European Union will have the opportunity to adopt the measures at a Wednesday meeting.

"The force of unity that we showed today is a fundamental element of confidence," said European Central Bank President Jean-Claude Trichet, but he added "there are still many things to do."

The measures adopted on Sunday include temporarily guaranteeing bank lending for up to five years, and taking equity stakes in distressed banks. The plan follows similar rescue packages announced last week by the UK, which committed €150 billion to help recapitalize banks, and the $700 billion rescue package in the U.S.

European officials did not release an estimate cost of the measures, but said each country will release figures for the measures they take individually.

Host President Sarkozy said the action is "not a gift to banks," but an interim measure needed to restore confidence in the markets. "States will have the possibility to guarantee the loans that banks take out, [and] guarantee them under different forms."

German Chancellor Angela Merkel, who along with Sarkozy called for co-ordinated action by the EU prior to the meeting, said the agreement will make the current crisis "more manageable."

"It will allow markets to start functioning again, that was our aim," she said, adding the measure send "a strong message to the markets."

As Germany's response to the crisis, it has developed a plan that will involve the creation of a special fund to provide equity capital worth up to €100 billion, the newspaper Handelsblatt reported. According to a German finance ministry spokesperson quoted by Reuters, Germany will publish details of its rescue package on Monday.

Similarly, France is expected to announce a rescue fund to the tune of €50 to €100 billion in order to protect the nation's banks by buying stakes in those threatened by failure, the New York Times reported, citing sources who worked on the plan.

Also on Sunday, the government of Norway announced plans to shore up bank liquidity, including the issue of up to 350 billion crowns ($57 billion) in government bonds. "This facility is tailored to the needs of Norwegian banks and in conformity with the G-7 statement on financial stability earlier this weekend," Prime Minister Jens Stoltenberg said in a statement.

By Stephen Huebl, This email address is being protected from spam bots, you need Javascript enabled to view it

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