PARIS — Europe put $2.3 trillion on the line Monday to protect the continent’s banks, a figure that dwarfs the Bush administration’s $700 billion rescue program, in its most unified response yet to the global financial crisis after a stumbling start.
The pledges by Britain and six countries that use the euro helped soothe stock markets, along with a promise by top central banks to provide unlimited short-term dollar credits.
The action by Germany, France, the Netherlands, Spain, Portugal, Austria and Britain came after weeks in which the governments often acted at cross purposes and sniped at one another — a piecemeal approach that failed to stop steep and frightening slides on financial markets.
“The time of each one for itself is fortunately over,” French President Nicolas Sarkozy said after a Cabinet meeting that approved France’s spending in the framework of the plan. “United Europe has pledged more than the United States.”
Sarkozy has taken a lead in getting the cooperation.
The pledged money will not go into a collective pot. Instead, governments were deciding individually how much to commit to supporting their own banks under broad guidelines agreed to at a summit Sunday. The sums are considered a maximum and might not all be spent if the financial crisis eases.
About $341 billion of the European pledges was earmarked to be spent on recapitalizing banks by buying stakes.
The pledges put a price tag on the package agreed to Sunday by the 15 countries that use the euro. They agreed to individually guarantee bank refinancing until the end of next year, rescue important failing banks through emergency cash injections and take other swift measures to encourage banks to lend to each other again.
Stock markets rebounded Monday after the European decision and other weekend efforts to find solutions to the financial crisis, which has crushed major banks in the U.S. and Europe and battered stock exchanges worldwide.
At the close, Germany’s DAX was up 518.14 points, or 11.4 percent, at 5,062.45, while France’s CAC-40 was up 355.01 points, or 11.2 percent, at 3,531.50. Britain’s FTSE 100 was up 324.84 points, or 8.3 percent, at 4,256.90, despite some hefty falls in the banks that have accepted government help.
