Euro Summit Draft Declaration Sets 14-Point Action Plan

PARIS -(Dow Jones)- Leaders of the 15 nations in the European single-currency zone are considering a 14-point plan designed to stabilize their roiling financial systems, according to a draft statement issued Sunday at the start of a summit in Paris.

The sweeping plan calls for euro-zone governments to issue guarantees and insurance, to buy stock in cash-strapped companies, to issue qualifying capital to financial institutions through preferred shares and other instruments and to act to stabilize long-term maturities.

"The scheme will be limited in amount, temporary and will be applied under close scrutiny of financial authorities until December 31st, 2009," the draft says.

The plan also calls on the European Central Bank to create a facility to acquire commercial paper from financial institutions and other companies in order to inject funds into cash-starved enterprises. The U.S. Federal Reserve last week set a similar plan into motion.

Euro-zone governments would also urged the ECB to keep a flexible stance in addressing the crisis. That could be interpreted as calling on the ECB to loosen monetary policy if needed. Indeed, the draft welcomes the ECB's participation in a coordinated round of official interest rate cuts by major central banks last week.

Without placing a cost on the program, or saying how it will be financed, the declaration says governments will be prudent.

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