LONDON (AFP) ? European stock markets and the euro drifted higher on Friday when investors were reassured by a Franco-German summit on the Greek debt crisis.
London's benchmark FTSE 100 index of top shares rose 0.28 percent to 5,714.92 points in midday trade, Frankfurt's DAX 30 won 1.08 percent to 7,186.67 points and in Paris the CAC 40 index gained 0.96 percent to 3,828.81.
The Stoxx 50 index of leading eurozone companies increased by 1.42 percent to 2,769.29 points.
In foreign exchange deals, the European single currency reversed earlier losses to stand at $1.4282, up from $1.4209 in New York late on Thursday.
"The euro rose after some soothing words from Angela Merkel and Nicolas Sarkozy at the Franco-German summit," said Forex.com research director Kathleen Brooks.
"It seems that Germany is converging towards the European Central Bank's view that there can be no default or credit event in Greece and a long-term solution to Greece's fiscal woes needs to be found quickly."
The leaders of France and Germany called Friday for a new Greece rescue package to be worked out as quickly as possible, but gave no details on how voluntary private involvement would work.
"We need a solution as soon as possible so that we have clarity ... We have been talking about this for the whole of May and June, discussing the same issues again and again without resolving them," Merkel said.
"Germany and France are determined at the upcoming EU summit ... to say that we want a quick solution," Merkel told reporters in Berlin after talks with Sarkozy in Berlin and ahead of a working lunch.
Sarkozy agreed, saying: "France and Germany want this new programme to be worked out as quickly as possible. There is no time to lose."
Both said that private investors should be involved in the new package on a voluntary basis.
Brooks added: "This has reassured the market after a week of turmoil. Now that it appears that Europe is speaking in one voice, the chance of a disorderly default in Athens has been greatly reduced.
"There are still risks out there -- Greece still needs to get its next tranche of bailout funds and political risk abounds -- but for now the euro is rallying on the back of increased optimism the Greek crisis won't spread to Portugal, Ireland or Spain."
In Athens, meanwhile, embattled Greek Prime Minister George Papandreou on Friday axed his finance minister, naming a former foe to implement deeply unpopular austerity measures and ward off economic meltdown.
Outgoing defence minister Evangelos Venizelos, a tough-talking party veteran who had challenged Papandreou for the party leadership in 2007, was promoted to the critical post and also named deputy prime minister.
Papandreou's government is locked in tough negotiations with its European peers for a new bailout after a previous EU-IMF rescue was deemed insufficient to get the recession-plagued Greek economy back on its feet.
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