The 15 eurozone countries will guarantee banks and inter-bank lending.
A meeting in Paris last night revealed the details of the plan.
The euro group countries endorsed the principles of the British plan for their own economies.
It comes as the UK Government reveals a similar plan and Australia and New Zealand went for guarantees, but not capital injections.
It came as the International Monetary Fund in Washington said it “strongly endorsed” the group of Group of Seven leading economies’ action plan to prevent any more important banks failing, unfreeze money markets, recapitalise banks, restore confidence of depositors and reopen markets in securitised assets.
The Paris statement said: “Governments remain committed to avoid any failure of systemically relevant institutions, through appropriate means including recapitalisation.”
“In doing so, we will be watchful regarding the interest of taxpayers and ensure that existing shareholders and management bear due consequences of the intervention.”
Banks that receive Emergency recapitalisation will have to follow an “appropriate restructuring plan,” the Europeans said.
Interbank loans will also be guaranteed until the end of next year, the draft statement said.
Individual European nations are now expected to outline their own bank support packages in the next few days.
Germany is expected to spend 50-100 billion euros buying new shares in banks.
Norway, which is not a member of the EU, also said it will borrow 41 billion euros to pay to inject extra cash into the country’s financial markets.
Britain was due to reveal plans to bolster the capital of its four major banks overnight; UK Prime Minister, Gordon Brown has discussions in Paris with the French president about the plan ahead of a meeting of all 15 leaders of the eurozone which was expected to reveal a similar plan to that devised by the British.
RBS, HBOS, Lloyds TSB and Barclays will announce before markets open on Monday that they are taking up the offer of the government’s bailout package announced on Wednesday.
The banks declined to comment, but reports said RBS and HBOS would be the first to accept an injection of government money in return for shares, known as re-capitalisation.
The 50-billion pound ($A125 billion) re-capitalisation plan, which would effectively see the banks part-nationalised, was the most eye-catching feature of the three-part bail-out rescue package.
The plan also makes available 450 billion pounds ($A1.13 trillion) in cash for banks and guarantees to encourage banks to start lending to each other again, a crucial function for the world economy.
Australia revealed a three part plan to guarantee all bank deposits for the next three years and to guarantee the wholesale funding of all Australian banks operating in global markets ,
The Government will put another $A4 billion into the non-bank part of the mortgage market to keep it alive.
The Australian government said the guarantee and wholesale funding deal was struck in concert with the New Zealand Government where Australia dominates with 80% of the banking market.
There was criticism over the weekend that the Group of Seven countries said the right things in their communiqué on Friday, but failed to back it up with any action.
There were hopes that the US, UK and Europe would produce proposals ahead of the markets opening in Asia this morning.
The US stock market suffered its worst weekly loss in history last week, with the Dow and S&P 500 falling 18.2%, and markets in Europe and Japan falling even further, losing more than 20%-24%. Our market was off 16%.
The Group of 20 rich and emerging countries said after its pre-IMF meeting that it was committed to using all the means available to tackle the financial crisis rocking world markets.
G20 members “committed to using all the economic and financial tools to assure the stability and well functioning of financial markets,” a statement said on Saturday after a meeting in Washington.
It said they also agreed to ensure that measures taken to ease the crisis “are closely communicated so that the action of one country does not come at the expense of others or the stability of the system as a whole.”
The G20, which includes emerging giants Brazil, Russia, China and India alongside the Group of Seven industrialised nations, gathered for a special meeting called by Brazil, the group chair, and US Treasury Secretary Henry Paulson on the crisis.
The G20 said the members of the group “stressed their resolve to work together to improve the regulation, supervision and the overall functioning of the world’s financial markets.”
Given the global impact of the crisis, there had to be international cooperation to bring it under the control.
The G7 – the United States, Britain, Canada, France, Germany, Italy and Japan – agreed on Friday to use all means available, including ensuring that no major bank would be allowed to fail, to try and resolve the crisis.
US President George W Bush attended the G20 meeting, having said earlier Saturday that the world’s richest economies were united on a “serious global response” to the financial meltdown.
“We will stand together in addressing this threat to our prosperity. We will do what it takes to resolve this crisis. And the world’s economy will emerge stronger as a result,” he said.
European leaders gathered in a hastily arranged summit in Paris yesterday with expectations that France, Germany and Italy will detail their countries’ plans to raise capital in the banking systems and ensure banks have access to funds.
