Brussels - The European Commission on Thursday cleared a French plan for re-financing troubled lenders, describing it as an "appropriate" system for injecting confidence in the country's financial markets.

Liquidity is to be provided by a special 265-billion-euro (337- billion-dollars) fund guaranteed by the state.

The European Union's executive arm is expected to approve the second part of France's financial rescue package, on recapitalization, some time next week, officials said.

The commission has so far approved rescue packages from Germany, Britain, Ireland, Denmark, Portugal and Sweden and is considering similar plans from the Netherlands, Italy and Spain. (dpa)