European stocks, euro rise on government progress

European stocks and the euro rose on Friday as Italy and Greece made progress towards installing new governments to pilot economic reforms. London\'s FTSE 100 index climbed 0.28 percent to 5,460.10 points approaching midday, Frankfurt\'s DAX 30 gained 0.52 percent to 5,898.59 points and in Paris the CAC 40 won 0.35 percent to 3,075.61. Milan stocks climbed 0.85 percent. The euro rose to $1.3639 from $1.3599 late in New York on Thursday. \"Equity markets are seemingly looking a little more kindly on Europe as we head into the weekend break with news of (Italy Prime Minister Silvio) Berlusconi\'s accelerated departure,\" said IG Markets trader Peter Stanhope. This was \"combined with progress from Greece over the formation of a coalition government, helping cheer stocks on a global basis,\" he added. The rate which Italy must pay to borrow money for 10 years, as signalled by trading on the bond market, eased on Friday to 6.659 percent, holding below the level of 7.0 percent which was breached at the height of the government crisis this week. Interest rates of about 7.0 percent are widely considered to be too high for Italy to finance its public deficit and carry its debt. Berlusconi has promised to step down once a package of reforms receives final approval from parliament. In Berlin, the head of the eurozone crisis fund called on Italy to act swiftly to reassure markets about its financial and political stability, in an interview in several European newspapers on Friday. \"Italy doesn\'t have much time to reassure the markets,\" said Klaus Regling, head of the European Financial Stability Facility, according to the Suddeutsche Zeitung newspaper. \"The country needs a functioning government as soon as possible,\" he said, adding that the fund was ready to help Italy immediately if it was asked. The stock rise in Milan was led by Telecom Italia, which has announced a sharp rise in profits for the third quarter. Shares in the telecom giant were up 4.08 percent at 0.8805 euros. Italy\'s biggest banks, UniCredit and Intesa Sanpaolo, rose 1.85 percent and 1.36 percent. In London, shares in Royal Bank of Scotland gained 2.89 percent to 21.72 pence, and in Lloyds Banking Group 2.50 percent to 27.85 pence. Asia-Pacific markets mostly rose Friday after Greece named a new prime minister to push through urgent reforms while Italy\'s borrowing costs eased as it searches for a successor to Berlusconi. The dollar fell to 77.37 yen from 77.63 yen on Thursday. A day after suffering a huge sell-off over Italy\'s growing debt crisis, a successful bond auction in Rome provided some respite. However, trade was cautious after growth forecasts for the eurozone were massively slashed, raising the prospect of another recession. Tokyo finished 0.16 percent higher and Sydney gained 1.23 percent. Former European Central Bank vice president Lucas Papademos was named as Greece\'s interim prime minister, bringing a close to days of talks and providing the chance of some stability in the country. And in Italy there were reports that former EU commissioner Mario Monti would likely replace Berlusconi as prime minister as pressure mounted on Rome to get its house in order to avoid becoming the next euro state to sink.