Eurozone emergency deal: Key elements
The key elements of an emergency "three-pronged" deal to fix the eurozone's debt crisis, which was clinched after marathon talks in Brussels.
Private banks holding Greek debt will accept a write-off of 50% of their returns.
The move is expected to cut the nation's debt load to 120% of its GDP in 2020. Under current conditions, it would have grown to 180%.
Reluctant banks had initially offered a 40% "haircut", but the deal was finally agreed after German Chancellor Angela Merkel and French President Nicolas Sarkozy joined direct negotiations on the issue on Thursday morning.
The firepower of the main euro bailout fund - known as the European Financial Stability Facility (EFSF) - is to be boosted from the 440bn euros set up earlier this year to 1tn euros.
There is about 250bn euros left available in the EFSF, which the summit statement said could be leveraged 4-5 times.
This can be done in two ways:
- By offering insurance to purchasers of eurozone members' debt - in principle making their bonds more attractive to investors and thereby lowering governments' borrowing costs.
- And by setting up a special investment vehicle which big private and public investors, including countries such as China, could contribute to.
Both means could be used simultaneously depending on circumstances, the summit statement said.
The framework for the new, increased fund should be in place in November.
European banks will be required to raise about 106bn euros in new capital by June 2012.
It is hoped that this would help shield them against losses resulting from any government defaults and protect larger economies - like Italy and Spain - from the market turmoil.
"We have reached an agreement which I believe lets us give a credible and ambitious and overall response to the Greek crisis," was how Mr Sarkozy summed up the deal.