German lawmakers have moved very quickly to officially put into a place a loan assistance package for debt ridden European Union countries. Citing the growing despair in the marketplace, German leaders noted that making the support package official was important to concerned consumers and investors.

For its part finance ministers in the Union met Friday to start the process of setting on more strict public finance rules. Similar to what the US Senate just voted to do yesterday with its major financial overhaul, European leaders want to relax markets by suggesting the current debt crisis is a one time deal.

It is not enough that leaders take action, they must do so swiftly because the longer that markets are left worrying, the greater their response to those concerns become. Panicked consumers and investors lead to even greater problems. Items being concerned include loss of voting rights if a country has a repeat debt crisis.

The Euro has been in recovery mode this week after falling well below $1.22 to start the week. Speculation of the possible bailout followed by confirmation has led to a Euro spike to near $1.26.

The biggest catalyst in overnight European trade and early New York currency trade was the approval by 16 German states for a 750 billion Euro bankruptcy support package. This amounts to around $937 billion. It includes 147.6 Euro of loan guarantees and the package is expected to be finalized promptly with the signing of the bill by German President Horst Koehler.

The package has yet to have a significant effect on European trading markets and the US stock market has been very volatile of late as well. Still, the Euro has received a boost, at least in the near-term.

Protecting the Euro’s value is a main point of emphasis with the debt support plan, but it could be a rocky road with the US economy already in recovery and the European situation still likely to get worse. Unless the Euro can regain strong footing above the current level, it could see more significant downward movement in the second half of the year.

The Euro is down about 18 per cent since the end of 2010.