Global stock markets rally

World stock markets surged Monday as European Union officials and a consortium of central bankers moved to buoy the euro and head off thefallout from Greece's debt crisis.

Under a three-year plan unveiled late Sunday, the EU Commission will make the equivalent of $80 billion available while countries from the 16-nation eurozone would promise backing for $580 billion.

The International Monetary Fund would contribute an additional sum of at least half of the EU's total contribution,Spanish Finance Minister Elena Salgado said, bringing the total package to more than $1 trillion.

North American markets responded positively to the news,with Toronto's S&P/TSX composite index closing up257 pointsto 11,949.5. In New York, the Dow Jones industrial average also rocketed higher, up 404.7points to10,785.1 at closing.

"It seems odd to me that this was all started by worries over government overspending, but it all gets fixed by somebody cutting a cheque for $1 trillion," said Allan White, a University of Toronto finance professor. "I don't think it can last."

In Halifax, Canadian Finance Minister Jim Flaherty described the deal as "comprehensive and credible" and said financial reform will be a key topic for Group of 20 policymakers.

"This was important in order to maintain confidence," he told reporters.

"Financial sector reform needs to be accelerated. And that will be a major topic of discussion when the G20 finance ministers meet in Korea at the beginning of June and when the leaders meet in Toronto at the end of June."

The Canadian dollar was also stronger,rising 1.86 centsto 97.66 cents US when North American stock markets closed.

The U.S. Federal Reserve and other central banks including the Bank of Canadaopened a program to ship U.S. dollars to Europe to further help head off the crisis.

Known as a dollar swap, the program provides funds to foreign private-sector banks to ensure they have enough funds to lend out to customers.

The Bank of Canada arranged foras much as $30 billion from the U.S. central bank if needed, reviving a swap arrangement with the Fed that had been allowed to expire at the start ofFebruary.

A similar program to supportlending in North America was launched in late 2008 before being wound down early this year.

'It could very well be that the storm has been weathered.' Tim Condon of ING

"It could very well be that the storm has been weathered," said Tim Condon, head of Asia research for ING in Singapore.

Europe's top finance officials were obviously "very shocked" by the market skepticism over the bailout of Greece, triggering Monday's headline-grabbing measures, he said.

But some analysts said themoves by the EU and central bankersmay not bolster investor confidence in the creditworthiness of all European countries, and there could be more speculative attacks on the debt of nations with weak finances.

"The bond market vigilantes are still hungry, they smell blood," said David Cohen, an economist with Action Economics in Singapore. "This package is trying to short-circuit that process, but it could be like the 1997-1998 Asian crisis where countries were attacked one by one."

Early Saturday, eurozone leaders gave final approval forloans worth over $100 billion to Greece over the next three years to keep it from imploding. The IMF approved its part of the Greek rescue package $40 billion worth of loans in Washington on Sunday.

Together, the IMF and EU bailouts give Greece enough money to avoid having to raise private-sector funds for two years, IMF officials said.