European shares rise with recovery fund talks in focus

(Reuters) – European shares opened higher on Friday, ahead of the European Council’s meeting to negotiate the EU recovery fund, with Germany’s Lufthansa gaining on signs of movement in its stalled government bailout.

The pan-European STOXX 600 <.stoxx>, which like other global markets has struggled in the face of new bouts of coronavirus infections in the China and a number of other economies, rose 0.5% at 0705 GMT, with Frankfurt shares <.gdaxi> leading gains.

The European Council will have its first meeting to discuss a commission’s proposal to raise 750 billion euros worth of debt to top up spending from joint coffers to be worth 1.1 trillion euros in 2021-27.

COVID-19 cases continued to rise as around 400 workers at a slaughterhouse in northern Germany tested positive for the virus on Thursday, while cases rose in several U.S. states and Beijing.

Among stocks, Lufthansa rose 3.5% after its biggest shareholder, German billionaire Heinz Hermann Thiele, reached out to Berlin politicians for talks, newspaper Handelsblatt reported, the latest step in a standoff over the airline’s 9 billion euro ($10.1 billion) bailout.

(Reporting by Shreyashi Sanyal in Bengaluru)