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Markets Encouraged By Plans To Calm Eurozone Panic

RENEE MONTAGNE, HOST:

And coming to the end of a tumultuous week of global economic news, we're seeing rising shares Asia, plus the euro coming close to a three-week high.

As NPR's Philip Reeves reports, markets are encouraged by reports that the world's central banks have come up with a plan to try to calm panic in the eurozone.

PHILIP REEVES, BYLINE: Investors have a lot to worry about right now. They're worried about Sunday's elections in Greece, and whether these will eventually lead to a Greek exit from the eurozone. They're worried that Spain might need another bail out and the contagion will sweep into debt-laden Italy, the eurozone's third largest economy.

Anxiety and turbulence in the eurozone has helped make this a volatile week on the markets. Global central banks are bracing themselves for worse and are moving to avert market panic ahead of the Greek vote. Reports say they're preparing to take coordinated action to stabilize the financial markets by providing liquidity.

Recession-hit Britain has already started. The Bank of England, along with the government, are to give the equivalent of tens of billions of dollars in cheap loans to banks to try to get them lending to businesses again. The bank is also activating an emergency liquidity plan, and will soon begin pumping $8 billion a month into the financial system.

Bank of England Governor, Mervyn King, unveiled these moves with an extraordinarily bleak speech. He said a large black cloud of uncertainty is hanging over the eurozone and the world economy.

SIR MERVYN KING: The black cloud has dampened animal spirits, so that businesses and households are battening down the hatches to prepare for the storms ahead.

REEVES: Philip Reeves, NPR News, London. Transcript provided by NPR, Copyright NPR.

NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

Philip Reeves is an award-winning international correspondent covering South America. Previously, he served as NPR's correspondent covering Pakistan, Afghanistan, and India.

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