Europe’s stock markets posted strong gains today as European Union leaders — with the exception of British prime minister David Cameron — agreed to a tighter, stricter fiscal union to protect the long-term prospects of the euro.
The FSTE MIB in Milan rose 3.4 percent to 15,483.91 while the CAC 40 in Paris gained 2.5 percent to 3,172.35. The DAX in Frankfurt climbed 1.9 percent to 5,986.71 while the FTSE 100 in London edged up 0.8 percent to 5,529.21.
The day’s biggest gainers included Carrefour, which rose 4.3 percent to 18.52 euros; Ferragamo, which climbed 3.2 percent to 11.66 euros, and Safilo Group, which advanced 3.6 percent to 5.16 euros. Losing ground were Hugo Boss, which slipped 3.1 percent to 58.75 euros; Benetton Group, which sank 4.3 percent to 2.89 euros, and Metro, which retreated 2.7 percent to 30.15 euros. The euro gained 0.2 percent against the dollar to $1.34.
During a crisis summit in Brussels, which started Thursday and continued today, European leaders agreed to sign up to a “fiscal pact” that asks them to adhere to tighter financial rules and penalties, ensuring that their debt-to-GDP ratios remain under control.
In an interview with the BBC, Cameron defended his decision to say no to tighter fiscal union. “I did the right thing for Britain…We were offered a treaty that didn’t have the right safeguards for Britain. Are we better off outside the euro? You bet we are,” Cameron said. He called aspects of the new fiscal pact “invasive” in terms of countries’ sovereignty and their ability to set their own budgets and rules.
“We’re not going to be involved in this quite complex treaty with quite tough punishments for countries in Europe that live beyond their means…What we’ve done is squarely in Britain’s national interests,” he said.
U.S. markets also gained ground. The S&P Retail Index was up 1 percent, or 5.55 points, to 535.83 and the Dow Jones Industrial Average had gained 1.4 percent, or 167.60 points, to 12,165.30 in midafternoon trading.
Among those perking up were, Bebe Stores Inc., up 5.3 percent to $8.06; Kenneth Cole Productions Inc., 4.9 percent to $10.77; G-III Apparel Group 3.5 percent to $24.86; Fossil Inc. 3.4 percent to $85.95, and Lululemon Athletica Inc., 3.3 percent to $47.37.