THE European Commission on Friday approved a French financial bailout plan designed to restore financial stability and shore up the banking sector.

The Commission found the French plan to be in line with European Union (EU) rules on state aid for overcoming the current financial crisis.

Under the French plan, banks will be able to get loans from a central agency, whose activities are guaranteed by the government, and they have to pay a premium of a normal market price.

The maximum sum that can be guaranteed is around 265 billion euros (345 billion U.S. dollars), the Commission said, describing it as an appropriate, necessary and proportionate means of remedying a serious disturbance in the French economy.

Yesterday, the Commission also approved a Dutch financial rescue plan involving a guarantee of 200 billion euros (US$261 billion) in bank loans.