Comprehensive euro debt deal reached

In an 11th hour meeting, European Union leaders announced an agreement on the euro zone's debt crisis. The talks that led to the agreement were postponed then picked up in a marathon session that lead well into the evening on Wednesday night. On Thursday morning, officials announced their agreement.

BRUSSELS, BELGIUM (Catholic Online) - According to French President Nicolas Sarkozy, Greek bondholders were willing to write down the value of Greek bonds by 50 percent which equates to €100 billion and will reduce the nation's debt from 150 percent to 120 percent.

He also announced that the leaders would increase the EU bailout fund known as the European Financial Stability Facility by four or five times its current size. He said that additional funding would be coming from the international monetary fund.

European leaders had previously anticipated an agreement earlier on Wednesday, however an impasse with bondholders prevented an agreement until early Thursday morning.

Other key terms of the agreement include mandating the banks raised their core capital levels to 9 percent which will help to create a buffer against losses. Thanks would have until the end of June 2012 to meet those new requirements. Banks that find difficulty in the capital goals may be able to seek aid from governments according to the agreement.

European Council President Herman Van Rompuy said, "the overarching goal of the exercise is to foster confidence in the European banking sector."

In another key vote on Wednesday, German legislators supported a proposal to use the €440 billion fund to ensure new issues of euro zone government bonds. They also approved a new investment plan that could be used to attract capital to the European Financial Stability Facility from private funds. Among those interested in the new fund is China.

With the terms of the agreement acceptable to most investors, and with one of the world's largest growing economies (China) showing an interest in investing in Europe, world markets have picked up. It is hoped that with this agreement a Greek default will be avoided, and investor confidence will once again begin to climb.

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