The new procedures will be in place until December 31, 2009, Sarkozy said.

"This is indeed a joint action that we are undertaking. This plan addresses all aspects of the financial crisis."

'Intolerable'

Sarkozy argued that to do nothing was not an option.

IN DEPTH


How the financial bubble burst

Q&A: The US financial meltdown

Reacting to the financial crisis

"The crisis has over the past days entered into a phase that makes it intolerable to opt for procrastination and a go-it-alone approach," he said.

He was careful to say that the measure is "not a gift to banks".

For his part, Jose Manuel Barroso, the European Commission president, said: "We have taken the right course for Europe, for our businesses and our citizens."

He said the rescue plan will "bring to an end the excessive pessimism of the markets".

"Co-ordinated action is essential for a gradual restoration of confidence."

Before joining his Eurozone colleagues, Sarkozy held bilateral talks with Gordon Brown, the British prime minister, to talk about his plans partially to nationalise some of UK's banks.

Britain does not use the euro.

Right direction

After briefing the other leaders, Brown said he expected confidence to be restored to the markets in a matter of days.

"I believe that in the next few days confidence in the banking system will be restored," he said.

"The decisions we take over the next few days will affect us for the years ahead."

Angela Merkel, the German chancellor, said the measures "will allow markets to start functioning again - that was our aim. It is a strong message to the markets."

James Henry, an economist, told Al Jazeera that the package was "a step in the right direction" indicating that "policy-makers are finally taking this seriously enough" to come to some consensus.
 
Though optimistic about the measures announced, he said there needed to be more clarity on what banks' balance sheets consisted of, the money needed to flow more quickly, and home owners and borrowers needed to be given some debt relief.

Henry added that one of the biggest things missing from the package was "real co-ordination on international regulation".

UK measure

Brown's appearance at the Paris summit came as The Sunday Times newspaper in London said Britain would launch its biggest retail bank rescue on Monday when the four largest banks - HBOS, Royal Bank of Scotland, Lloyds TSB and Barclays - ask for a combined $60.5bn lifeline.

The unprecedented move would make the government the biggest shareholder in at least two banks, HBOS and Royal Bank of Scotland, the newspaper said on its website.

It did not give a named source for its information.

No government officials or representatives from the four banks were immediately available to comment on the report.