Major European stock markets are rebounding 1 December led by banking shares after troubled United Arab Emirates’ conglomerate Dubai World announced it was in talks with lenders to restructure $29 billion worth of debt. Bourses were relieved by Dubai World’s effort to contain the damage of a massive debt default, and by the lesser amount being restructured. Banks will need to agree rapidly on new terms to avoid default on a $3.5b bond by Nakheel, one of the companies owned by Dubai World, coming due 14 December.

Markets reacted badly at the end of last week when Dubai World said it was suspending debt payments on $60b worth of debt. A Dubai government official said the government was under no obligation to rescue banks from bad loans, Monday 30 November.

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