DAX30 advanced 58.19 points or 0.85 percent to 6,906.22, CAC 40 rose 26.08 points or 0.76 percent to 3,465.70 and the FTSE 100 advanced 39.20 points or 0.66 percent to 5,944.27.
European Finance Ministers are meeting in Brussels Monday and are expected to approve a second rescue package worth 130 billion euros ($170.9 billion) for Greece as major Eurozone powers have assured that they would not allow a disorderly Greece default.
Greece faces a looming deadline on March 20 when it needs to make repayments on a 14.5 billion euro bond, or become the first country in the euro's 13-year history to default. The Greek parliament passed extra austerity measures worth $430 million last week to secure second rescue package. The latest austerity package includes cuts in pensions, layoffs of formerly tenured government workers and sharp tax hikes.
However, according to some analysts, there are indeed chances that the proposed deal could actually collapse. The most significant hurdle to a final deal is Greece's unwillingness to agree to further tough conditions, like the requirement of implementing a 3.3-billion-euro spending cuts and tax rises.
The sentiment also strengthened after China and Japan agreed to jointly respond to any request by the International Monetary Fund (IMF) for additional funding to help stabilize the Eurozone sovereign debt crisis.
Among the banking stocks, Credit Agricole SA surged 3.72 percent, BNP Paribas SA gained 2.4 percent and Commerzbank AG advanced 2.16, while Deutsche Bank AG gained 1.96 percent.
Meanwhile stock in Asian gained after China's central bank announced a second cut in its banks’ reserve requirement ratio (RRR)-- the level of reserves banks must hold—by 50bps to 20.5 percent. The cut is the second in nearly three months. China first cut its RRR by 50bps to 21.0 percent on Nov 30, the first cut since the 2008 global crisis.
The latest move from the central bank will boost banks' lending capacity by an estimated 350-400 billion yuan ($55.6-$63.5 billion). Analysts’ at Credit Agricole Research expects further RRR cuts - up to 200bp - this year, and believe policy support will help engineer a soft landing in the Chinese economy.
Crude oil futures advanced on news that Iran has stopped selling crude to British and French companies. Light sweet crude for March delivery gained 1.63 percent to $104.92 a barrel and Brent crude oil futures for April delivery rose 1.11 percent to $120.91 a barrel.