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EU leaders, bankers and institutions reach a breakthrough deal on the Greek debt crisis at the EU Summit in Brussels on Wednesday. The agreement includes a 50% reduction of Greece's debt and a more robust bailout fund. Our correspondent in Brussels brings us the details.
European leaders and heads of state gather at the EU Summit in Brussels on Wednesday for what they hope will be a turning point in the European financial crisis.
[Georgios Papandreou, Prime Minister of Greece]:
"Now is the time for the European leadership collectively to take decisions to end the uncertainty, end the crisis, turn the page and make sure we make a big step forward for a better future, for prosperity and security of our peoples in Europe."
After Wednesday's marathon meeting lasting well into the night, agreement was reached on three major points.
First, banks affected by the Greek debt crisis have agreed to a 50% haircut on what they're owed.
[Herman Van Rompuy, President of the European Council]:
"It was agreed by them tonight and it amounts to a nominal discount of 50% of national Greek debt."
Second, recapitalization of European banks.
[Herman Van Rompuy, President of the European Council]:
"We approved a coordinated scheme to recapitalize banks across Europe. The ratio of the highest quality capital will be increased to 9 %. This will enable the banks to withstand shocks important in the current exceptional circumstances of course."
Third, the European Financial Stability Facility -- or EFSF --previously at the level of 440 billion euros, will now be increased to 1 trillion euros.
The hope is that this will keep the crisis from spreading to other eurozone countries.