27 Oct, 2011

Eurozone agrees a deal on debt crisis

Shares have jumped after eurozone leaders agreed a deal that they say will help resolve the debt crisis.   The eurozone agreed a deal on expanding the bailout fund and banks taking losses on Greek debt in exchange for recapitalisation.   Leaders from all 27 European Union nations have finally thrashed out a deal to solve the crisis started by concern over how Greece would cope with its debts.   Greece, the Irish Republic and Portugal have all required bailouts and this last week of talks was prompted by fears the crisis would spread to the larger economies of Spain and Italy.

EU leaders said measures to restore confidence in the bloc’s banks “are urgently needed and are necessary in the context of strengthening prudential control of the EU banking sector”.   The agreement replaced a deal that had been reached at a July summit, when the eurozone offered 109bn euros in aid and banks agreed to take a 21{6060b2de664e4eaa3e7b7e86961ce2c4bbd7a29b6c1097abf8257a4e5b07383e} loss on their debt holdings.

Credit: Reuters/BBC/DW-World

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