After an intense night of talks, which clearly took its toll on some, European leaders struck a deal over Greece's second rescue package.
European leaders and bankers meeting in Brussels agreed a 50 percent writedown on Greece's debt, reducing it by 100 billion euros.
They're now hoping the deal will draw a line under a crisis which has sent shockwaves through the world's financial markets and threatened the stability of the single currency.
French President Nicolas Sarkozy and Germany Chancellor Angela Merkel appeared relieved.
(SOUNDBITE)(French) FRENCH PRESIDENT NICOLAS SARKOZY SAYING:
"I think that the result will be welcomed by the entire world, which was expecting strong decisions by the euro zone. I think these decisions have been taken."
(SOUNDBITE) (German) GERMAN CHANCELLOR ANGELA MERKEL SAYING:
"I am aware, and everybody was aware that the whole world was looking at this meeting. That we can show the world how we can guard ourselves from this deep economic crisis. And I think that tonight we Europeans have taken the right measures.''
Despite the optimism from the euro zone's two largest economies, steps have now been taken to limit contagion.
Europe's bailout fund has been increased to around 1.0 trillion euros.
The fund has already been used to assist the ailing economies of Ireland , Portugal and Greece.
Leaders now hope its enough to stave off the debt-ridden problems in the region's third and fourth largest economies--Italy and Spain.
Italy is expected to take more action with regards to structural reforms to prevent it from following in Greece's footsteps.
European banks will also be recapitalised by around 106 billion euros. But analysts say it still might not be enough to stave off further problems.
Nick Beecroft is from Saxo Bank.
(SOUNDBITE) (English) NICK BEECROFT, SENIOR MARKETS CONSULTANT, SAXO BANK, SAYING:
''The reason the banks are in trouble is this circular situation that they held a lot of sovereign debt, the sovereign debt gets into trouble and so therefore banks get into trouble, and because the banks gets into trouble the sovereign debt is under more pressure, so it was and is still a vicious circle and that i don't think has finally been addressed yet.''
For now though European leaders are hopeful they've done enough to stop the debt crisis from spiralling out of control.
But the true test will be how the markets react once they've swallowed this bitter sweet pill and pick apart the seams of the agreement.
Basmah Fahim, Reuters
