Europe’s leaders have finally agreed a euro zone rescue plan after marathon talks lasting more than eight hours.
The main points of the deal surrounded three issues – recapitalisation of the banks to act as a barrier against contagion between debt-ridden countries.
Secondly, banks have agreed to write off 50 per cent of Greek debt, while the euro zone countries will offer sweeteners to the private sector.
And third, the European bail out fund is to be boosted. The EFSF was 440 billion euros but through offering insurance to buyers of euro zone debt or via a so-called special purpose investment vehicle the headline figure will rise to one trillion.
The aim is to attract investment from China and Brazil.