Global markets rally as EU moves closer to Greek bailout

European markets rallied this morning on news the European Union will support troubled Greece if it introduces additional spending cuts and a privatisation programme.

Greece faces a crucial vote of confidence on Prime Minister George Papandreou's new cabinet today, its first step towards gaining a vital €12bn (£11bn) loan funded by the EU and the International Monetary Fund.

Greece needs this latest instalment of the EU and IMF' s €110bn aid package by July to be able to keep up with payments to creditors of its huge debts, which amount to roughly €30,000 per person, the BBC reports.

However, despite the impending vote, markets moved higher in early trading, with the FTSE 100 gaining roughly 0.47% to reach 5,720.06. In France, the Cac 40 gained 0.74% to reach 3,827.96, while the German Dax climbed 0.75% to reach 7,203.81.

Markets in the US also gained last night. The Dow Jones increased by 0.63% to reach 12,080.40, while the S&P 500 Index climbed 0.54% to 1,278.36.