FRANCE HAS hailed the deal hammered out in Brussels as having saved the euro, while shares in the country’s largest banks rose sharply on the back of the new initiative.

Returning to Paris after helping secure an “ambitious, global and credible” response to the euro zone debt crisis, President Nicolas Sarkozy was buoyed by an enthusiastic early response from the stock market and limited opposition criticism of his strategy. He was due to take advantage of the mood last night with a prime-time television appearance to explain the deal to the French people.

The CAC 40 had one of its strongest days in months, up 6.28 per cent, while shares in Société Générale, BNP Paribas and Crédit Agricole – all of which have been badly hit by worries over their exposure to Greek debt – also rose sharply.

This followed news that French banks would only have to find another €8.8 billion to cover their part of the €106 billion capital shortfall among European lenders pinpointed by European leaders.

Finance minister François Baroin said he was confident the deal would get the euro zone out of trouble. “It will enable the economy to rebound and will stabilise the euro zone and global growth.”