EU leaders reach a deal to tackle debt crisis

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USA Today:

Banks agreed this morning to take half of what they are owed by Greece as part of a deal brokered by European leaders to solve the continent's debt crisis and prevent it from igniting a new global financial meltdown.

The strategy that emerged after 10 hours of negotiations focused on three key points:

• Significant reduction in Greece's debts.

• Shoring up the continent's banks, partly so they can sustain the deeper losses on Greek bonds.

• Reinforcement of a European bailout fund so it can serve as a euro1 trillion ($1.39 trillion) firewall to prevent larger economies like Italy and Spain from being dragged into the crisis.

World stock markets surged higher Thursday on the news. Oil prices rose above $92 per barrel while the euro gained strongly — a signal investors were relieved at the outcome of the contentious negotiations.