Relief coupled with apprehension were the emotions that dominated on Thursday following the Euro-zone agreement reached after tough negotiations that lasted into the early hours of the morning. Markets reacted favourably registering a rise of up to five per cent and stocks of French and German banks (which hold a major part of the Greek sovereign debt) rose spectacularly. Greek Prime Minister Georges Papandreou described the agreement as “historic” saying it “opened a new era” of cooperation in Europe.
Leaders of the 17 Euro-zone nations agreed on a three pronged approach to solving the Euro crisis: wipe off 50 per cent of the Greek debt, recapitalise European banks and strengthen the European Financial Stability Facility (EFSF) to leverage up to a trillion Euros in order to prevent Italy or Spain from collapsing.
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