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EC Approves French Bank Bailout Plan

European Union regulators Monday approved France's multi-billion dollar plan to help troubled banks, while world markets rose sharply on news Washington may do more to boost its economy.

The European Commission approved the French plans after setting out new rules requiring banks to pay a premium for the money they receive based on their financial health.

The commission softened the rules on lending state funds to private banks in order to avoid distorting competition.

France plans to spend about $13 billion initially to recapitalize its major banks and thereby ease lending and revitalize the crippled economy.

EU Competition Commissioner Neelie Kroes says she expects Austria's bank rescue plans to be approved soon, and that Germany's proposal will be considered after it is revised.

In London Monday, the leaders of Britain, France and the European Commission are discussing the world financial crisis with business executives.

German Chancellor Angela Merkel is not attending the talks, which come ahead of a European Union summit in Brussels later this week.

Key European and U.S. markets were up in morning trading. And stock markets around Asia rallied to a three-week high Monday.

Among the positive signs spurring trade are U.S. President-elect Barack Obama's plans to rebuild U.S. infrastructure, and indications the U.S. Congress is ready to help the ailing auto industry.

Economic analysts say Asian exporters do not want to see the American car industry fail because that could make U.S. policy makers more favorable toward trade protectionism.

Some information for this report was provided by AFP, AP and Reuters.