Euro Soars â€" for Now â€" on News of Massive EU Rescue Fund

The European Union has put a figure on the program that its leaders hope will shore up the euro and European financial markets, and what a figure it is: 750 billion euros. That's the amount, equal to a shade under $1 trillion, that EU finance ministers and the International Monetary Fund have pledged between them for loans to struggling EU member states.

The European Central Bank has vowed to do its part, too, by buying bonds of public and private issuers in the euro zone.

So far, so good, at least as far as the markets are concerned. The euro and stock markets around the world shot up when they opened after the deal was announced Sunday, and stocks added to their gains throughout the night. Indexes closed up between 1 percent and 4 percent in Asia and were as much as 8 percent higher in Europe Monday afternoon.

U.S. stocks rose 4 percent in the opening minutes of trading Monday and the euro was at $1.286, up more than a cent.

The moves are impressive and surely something like what EU leaders were hoping for, and there probably are further gains to come. Merely by announcing the agreement and letting the markets know that half a trillion euros could be put to work at any time, the finance ministers will force prospective sellers to stand aside and lure in buyers.

When things are likely to become tricky is after markets stabilize at higher levels and the EU money comes in. Big traders have a way of knowing who's doing what, and for how much; as soon as they get a sense that the ammunition is starting to run low, they may feel emboldened to launch another attack on the euro.

I said when leaders began their consultations on Saturday that whatever agreement was cooked up was likely to be successful, but only for about a week. The hefty amount that EU leaders are sinking into defending the euro and the fact that the currency had been sold so relentlessly may keep the rebound going somewhat longer.

The intervention doesn't address the fundamental economic and political problems besetting Europe, however, and so no matter how high the euro goes in the next few days or weeks, it's likely to come right back down again and take stocks and bonds with it.

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