Jose Manuel Barroso: EU has taken 'unthinkable' steps

European leaders have agreed to send money directly to struggling banks without having to channel funds via a government, which currently adds to a country's deficit.

The agreement is aimed particularly at rescuing Spain's troubled banks and reducing the borrowing costs of southern European countries.

President of the European Council, Jose Manuel Barroso, said he hoped the outcome of the summit had surprised those who doubted the council's ability to find a way out of the crisis.

He also said the latest meeting had taken decisions that were unthinkable only a few months ago.