The announcement by the central banks of the eurozone, Canada, Britain, Japan, United States and Switzerland that they would lower the cost of providing dollars to banks sent instant relief around the world.
In early trade Hong Kong shares surged 5.85 percent, Tokyo was 2.41 percent higher and Seoul rallied more than four percent while Sydney gained 2.65 percent and Shanghai was up 3.35 percent.
The advances followed a four percent surge on Wall Street’s major indexes and similar advances across Europe.
But the lingering threat of a eurozone meltdown weeks from Christmas mean the region’s leaders still have central issues to resolve at a pivotal summit next week.
The warnings from European politicians and officials about the consequences of the debt crisis have become increasingly apocalyptic.
In a magazine interview published Wednesday French Foreign Minister Alain Juppe spoke of an “existential” crisis: the collapse of the eurozone could mean the end of the European Union itself, he said.
“In that eventuality, everything becomes possible, even the worst,” he said.
“We have flattered ourselves for decades that we have eradicated the danger of conflict inside our continent, but let’s not be too sure.”
Olli Rehn, European Commissioner for monetary policy, on Wednesday urged leaders to take a leap of faith on further economic and monetary union or suffer the consequences.
“Economic and monetary union will either have to be completed through much deeper integration or we will have to accept a gradual disintegration of over half a century of European integration,” Rehn said.
Government finance consultant Sony Kapoor of Re-Define said central bankers had provided an impressive “cushion” against panic but it did not obscure the “dark shadow” cast over the world economy.
Nearly two years after Greece revealed its debt crisis, sending shockwaves around the eurozone, the problem remains on how to reassure markets.
At the sharp end, commercial banks are stuck with depreciating government bonds.
The central banks said they would provide funds at low rates until February 2013 to “mitigate the effects of such strains on the supply of credit.”
However, Bank of Japan Governor Masaaki Shirakawa warned that the move was not enough on its own to solve Europe’s fiscal woes.
“The European debt problem can’t be solved by liquidity provisions alone,” he told a press conference, according to Dow Jones Newswires.
US President Barack Obama said he was “cautiously hopeful” that key European players were ready to do the “right thing” to resolve their problems.
He told supporters at a fundraising event in New York he was spending “an awful lot” of time making trans-Atlantic calls because of the possible knock-on effect on the US economy.
“When you look at what’s happening in Europe, both to the banks and countries like Italy who need to refinance their debt, that can have a profound impact on what happens here.”
“But I’m cautiously hopeful that they have recognised that they need to do the right thing.”
Ireland’s Prime Minister Enda Kenny called Wednesday for swift political action to stop the rot.
“This problem must be dealt with politically — and dealt with now,” said Kenny, who presides over an economy that had to be bailed last year with a 85-billion-euro ($119 billion) EU-IMF rescue package.
He has joined other European politicians who want the European Central Bank to play a greater role in rallying European economies.
But Germany is holding out against the idea, saying it would amount to a breach of its independence and lead to rampant price rises.
There have been calls for the ECB to join forces with the International Monetary Fund to intervene, with reports that the IMF was in ready to provide support to Italy and Spain.
But Italy’s new Prime Minister Mario Monti insisted that Rome had “never envisaged” an approach to the US-based fund, while IMF chief Christine Lagarde dismissed the reports as “wonderful rumours”.
Monti, who is also acting finance minister, still faces intense pressure on bond markets over a debt mountain of nearly two trillion euros, amid fears of a “run” on the country.
Rome is under EU orders backed by the IMF to shield its public finances with a multi-billion-euro 2012 budget “buffer”, which he will unveil on Monday.
Adding to the gloom, new EU data Wednesday showed unemployment in the eurozone rose to an all-time record of 10.3 percent in October.
The Eurostat data agency estimated nearly 16.3 million men and women were out of work last month after the ranks of the unemployed rose by 126,000 from September.
In Greece, politicians’ commitments to take all necessary measures to implement an austere European recovery plan will be tested as unions take to the streets in another protest against the latest round of austerity cuts.