Markets jump as Merkel signals fiscal union for EU

German Chancellor Angela Merkel helped lift markets further today after revealing moves towards "fiscal union" in Europe were afoot.

Merkel said a new EU treaty was necessary to set up such a union, while stricter budget discipline also needed to be enforced. "The lessons are very simple: Rules must be adhered to, adherence must be monitored, non-adherence must have consequences," she said. Leaders also have to "overcome fundamental flaws in the construction of the euro area," she said, according to Bloomberg. The speech lifted markets which had already been in positive territory, with London's FTSE 100 index up 1.27% to 5,569 by 2.40pm while the French Cac 40 climbed 1.65% to 3,181 and the German Dax gained 1.25% ...