European stocks rallied the most in seven months after policymakers eased repayment rules for Spanish banks, relaxed conditions for possible aid to Italy and unveiled a $149 billion growth plan for the region’s economy. Banco Santander SA paced banks higher, jumping 5.6 percent, after euro-area leaders at a summit in Brussels dropped a requirement that their governments get preferred-creditor status on crisis loans to Spain’s lenders. Actelion Ltd. climbed 2.5 percent after getting U.S. approval for its Veletri drug. The Stoxx Europe 600 Index rose 2.8 percent to 251.49 at 3:20 p.m. in London, heading for a weekly gain of 2 percent. The benchmark gauge has jumped 4.9 percent this month as Greece formed a coalition government after its second election in six weeks, easing concern the nation will leave the euro. “The European summit has given a very precious chance to Italy and Spain,” said Theodore Krintas, managing director of Attica Wealth Management, which manages 100 million euros ($126 million). “They’re addressing directly the needs of both countries to reduce their funding costs. They will be addressing all other banking unification issues in a very short period of time. By European standards, this is a quick move.” The Stoxx 600, which climbed 7.7 percent in the first quarter for the best start to a year since 2006, has lost 4.5 percent in the three months through June as Spanish bond yields surged and political discord persisted in Greece. The volume of shares changing hands in companies on the gauge Friday was 35 percent higher than the average of the last 30 days, according to data compiled by Bloomberg. After talks that stretched until Friday morning, leaders of the 17 euro nations dropped the requirement that governments get preferred-creditor status on crisis loans to Spain’s banks and opened the door to recapitalizing lenders directly with bailout funds once Europe sets up a single banking supervisor. The leaders also discussed reducing the market pressure on Italy and Spain by allowing them to access rescue loans without relinquishing control of their economies. European Union leaders late Thursday approved a 120 billion euro plan to promote growth in the 27-nation bloc including a capital boost for the European Investment Bank. The Euro Stoxx 50 Index, the currency union’s benchmark, has dropped 3.3 percent so far in 2012, extending two years of losses. The decline has pushed stocks to the lowest valuations ever, prompting fund managers from Invesco Ltd. to JPMorgan Chase & Co. to increase holdings in Spain, Italy and Germany. National benchmark indexes advanced in all 18 western-European markets. The U.K.’s FTSE 100 Index rose 2.1 percent, France’s CAC 40 Index gained 4.1 percent and Germany’s DAX Index added 4 percent. A gauge of European banks was the among the best-performing industry groups on the Stoxx 600, rallying 3.6 percent. Santander gained 5.6 percent to 5.16 euros. Banco Bilbao Vizcaya Argentaria SA jumped 6.9 percent to 5.52 euros. In Milan, UniCredit SpA and Intesa Sanpaolo SpA added 8.5 percent to 2.83 euros and 8.2 percent to 1.08 euros, respectively. National Bank of Greece SA, the country’s largest lender, surged 13 percent to 1.40 euros. Credit Suisse Group AG rose 5.3 percent to 17.46 Swiss francs after it said it expected to report a profit for the group and all divisions for the second quarter. Actelion climbed 2.5 percent to 39.09 francs after it said it received U.S. Food and Drug Administration approval for its Veletri drug for treating pulmonary arterial hypertension. Cairn Energy Plc advanced 3.6 percent to 265.2 pence after it raised 20.6 billion rupees ($365 million) selling a stake in Cairn India Ltd., operator of the nation’s biggest oil deposit on land. The sale was at the lower end of its proposed price range, said a person with direct knowledge of the matter. Daimler AG gained 4.2 percent to 35.25 euros after the German company and Tokyo-based Nissan agreed to jointly supply each other light-duty trucks in Japan, extending the cooperation between the two automakers. Peugeot SA climbed 5 percent to 7.74, while Fiat SpA added 4.9 percent to 3.94 euros as automakers advanced. Casino Guichard-Perrachon SA, the French retailer, rose 3 percent to 69.02 euros after agreeing to acquire full control of the Monoprix supermarket chain from Groupe Galeries Lafayette for 1.18 billion euros, resolving a dispute between the partners. Berkeley Group Holdings Plc added 3.9 percent to 1,418 pence. The U.K.’s largest homebuilder by market value said annual profit rose 66 percent after the company sold more of its homes at higher prices. Deutsche Boerse AG, the operator of the Frankfurt stock exchange, rallied 6.7 percent to 42.11 euros. The stock was raised to overweight, the equivalent of buy, from neutral at JPMorgan Chase & Co. Vivendi SA gained 2.6 percent to 14.56 euros. JP Morgan raised the shares to overweight from neutral. The stock jumped 5.5 percent Thursday after people familiar with the matter said CEO Jean-Bernard Levy was stepping down. The company confirmed the news after the market closed.