- Eurozone finance ministers meet in Brussels
- EU Commission approves Banif recapitalisation plan
- German Chancellor speaks out on coalition defeat
- Japan's central bank begins policy meeting
FTSE Mibtel 30: 0.44%
Ibex 35: 0.72%
Stoxx 600: 0.26%
European equities ended Monday on a high note as Eurozone finance ministers gathered in Brussels for the first time this year.
The ministers met to discuss the issue of using direct aid from the bloc's permanent bailout fund to support banks.
Dutch Finance Minister Jeroene Dijsselbloem said restoring the trust in Europe was the main task at hand, according to Reuters.
"There seems to be a new basis, a new basis for trust and we have to work to announce it, to strengthen it and to build new growth and jobs on that basis of trust, that is, in as short as I can say it, what is to be done in the Eurogroup."
In separate report, the European Commission has approved a €1.1bn government recapitalisation plan for Portugal's eighth largest bank Banco Internacional do Funchal (Banif).
The rescue plan was given the green light on condition Portuguese authorities present a restructuring scheme for the lender by the end of March.
The country plans to recapitalise the bank via a €700m subscription of shares
and €400m in hybrid securities to help the organisation comply with capital requirements set by the Portuguese banking regulator.
Coalition defeat was painful, says German Chancellor
German Chancellor Angela Merkel's coalition of the Christian Democrats and the Free Democrats was defeated in a vital state election on Sunday.
The coalition lost control of the Lower Saxony to the Social Democrats in partnership with the Greens. It comes just eight months before Germany heads to nationwide polls.
Merkel described her government coalition's defeat as 'painful'.
"Of course when you have been on such an emotional rollercoaster then a defeat is that much more painful," Merkel was reported as saying.
"We have got to ensure that in future election campaigns we get the necessary majorities together."
Germany's Economics Minister Phillip Roesler has offered to tender his resignation as the head of Free Democrats following the defeat, sources told AFP.
Japan's central bank convenes
A two-day policy meeting with Japan's central bank has kicked off and is expected to lead to new measures to boost the economy.
The government has been pushing Bank of Japan to adopt a 2% target for inflation but it seems more likely bank will decide to expand its asset purchase programme.
In the lead up to the meeting, the Yen
strengthened against all 16 of its major counterparts after dropping 13% against the dollar
in the past three months.
Air France-KLM takes flight
Air France-KLM Group gained 3.77% to €8.40 after Credit Suisse raised Europe's biggest airline's shares to neutral from underperform.
Henderson Group rose 4.96% to 158.70p after analysts from Citigroup Inc. and Shore Capital Group Ltd. upgraded the asset manager to buy.
Luxury goods were hit hard as LVMH Moet Hennessy Louis Vuitton SA fell 1.31% €139.60 and Burberry Group dropped 1.37% to 1,367.00p.
Pearson fell 2.91% to 1,202.00p pence after the owner of the Financial Times lowered its profit forecast for 2012 to about 84p a share from a previous estimate of 84.9p. The newspaper said tough market conditions and significantly lower earnings at its professional education and FT Group businesses brought down the price.
Euro/dollar remains steady
The euro/dollar declined by 0.03% at 1.3317.
Front month Brent crude futures were down by 0.377 at $111.470.