In the early hours of this morning the Euro zone leaders finally put together a deal with private banks to accept a loss of 50 percent on the Greek government debt that they hold.

In a summit that lasted for 10 hours another key agreement was struck, with the overall rescue fund boosted to 1 Trillion Euros providing more financial firepower in the fight to stop contagion in the Eurozone. Ireland, Portugal and Greece have already been helped by the fund and now it is hoped the increased size will enable Euro leaders to stop contagion engulfing the Spanish and Italian economies.

Markets however have reacted positively to the announcement with Euro stocks higher and the Euro trading above €1.40 against the US Dollar. Support for the Euro and therefore the global economy helped the Australian Dollar benefit, moving almost a cent and a half higher against the US Dollar to 1.0564.

The overall deal has been viewed by some as not ambitious enough. These new measures seem to only buy the Eurozone time with Greece’s debt to GDP ratio still around 120% by 2012.

"Yes But" The pound sterling fell off a cliff against the euro and that affects most on the BE Spanish thread.

who is going to pay for the loss the banks make on this ? ?
thats right not the banks !!
it will be us, the people with pensions and savings.
most accounts are already paying no more than 1% whilst they charge 15%+ on loans.
knew my old dad was right and I should have been a banker and made oodles instead of owing them oodles

The 'headline' grabbing details are known (investors in Greece will lose out etc) but other details are still to be worked out.

For example, Europe's leaders want to have a bigger 'bailout' fund - but they haven't described how its going to be achieved