President of the European Central Bank (ECB) Christine Lagarde speaks during a debate on the Eurozone’s economic governance and ECB activities at the European Parliament in Strasbourg, eastern France.— AFP

FRANKFURT: European Central Bank chief Christine Lagarde yesterday praised EU leaders for agreeing a huge recovery plan for their coronavirus-ravaged economies, saying it showed the bloc “steps up and comes together” in times of crisis. After four days and four nights of wrangling, European Union leaders sealed the deal on a 750-billion-euro ($858 billion) rescue package that will consist of loans and grants for the hardest-hit member states.

The deal “shows that when most needed, the EU steps up and comes together to help the people of Europe,” Lagarde tweeted. “Thank you for your resilience and determined action over the last days. We can only fight the economic consequences of COVID-19 by working together.” The ECB has taken drastic action in recent months to cushion the economic blow from the pandemic, which has plunged the region into its worst recession in modern history.

The Frankfurt institution has rolled out an unprecedented 1.3-trillion-euro pandemic emergency bond-buying scheme as well as offering ultra-low rates and cheap loans to banks to help keep credit flowing and encourage spending and investment. But Lagarde has repeatedly urged governments to support the efforts with fiscal stimulus.

ECB governors last week held back from topping up their monetary stimulus to the eurozone economy as the EU summit loomed, with Lagarde calling on leaders to do their bit and “agree on an ambitious package”. “After the ECB has been the only game in town for quite some time now, it looks like a second team has entered the game,” ING bank analyst Carsten Brzeski said.

“That should take some of the pressure off of the ECB in the aftermath of this historical crisis. Probably even more if the second team was to improve its team play.” Meanwhile, European shares rallied to four-month highs yesterday, with Germany’s blue-chip DAX turning positive for the year, after EU leaders agreed on a landmark stimulus package to revive the bloc’s economies from a coronavirus-induced slump.

The pan-European STOXX 600 jumped 1.1 percent to its highest level since March 5, while an index of eurozone blue-chip stocks was up 1.7 percent at its highest since March 3. The global mood also brightened on growing optimism about a COVID-19 treatment after promising early data from trials of three potential vaccines. European Union leaders clinched a “historic” deal in the early hours of Tuesday on a 750-billion-euro ($856 billion)recovery fund and its related 1.1-trillion-euro budget for 2017-2021 that they hope will help repair the continent’s deepest recession since World War Two.

“It will add to the foundation of the current bull market,” said Teeuwe Mevissen, senior macro strategist at Rabobank. “It will have a long-term impact in the sense that if the European Union finds itself in a similar situation in the future, then markets will expect that governments will come to the rescue.”

Germany’s DAX surged 1.9 percent to erase all its losses for the year. The index is hovering near Feb. 24 highs, boosted by tech major SAP SE. A gauge of European stock market volatility sank to its lowest since Feb. 25. Blue-chip share indexes in Spain and Italy, which are among the south European countries set to benefit from the EU deal, gained 2.1 percent and 2.4 percent respectively, while euro zone banks jumped 4 percent.

Bayer AG rose 2 percent after a California appeals court reduced the amount of damages by 74 percent in a case claiming the company’s Roundup weed killer caused cancer. Adevinta soared 36.4 percent after US firm Ebay Inc agreed to sell its classified ads business to the Norwegian group in a deal worth $9.2 billion. In earnings-driven moves, Logitech International SA rose 0.2 percent after the maker of computer peripherals raised its outlook for fiscal 2021. — Agencies