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European leaders reach agreement on debt plans

Leaders in the Eurozone came to an agreement over how they plan to solve the regions deepening debt crisis.

According to BBC reports, they plan to take a ‘three pronged’ approach, to which investors have already reacted positively.

Under the new plans, private banks holding Greek debt will accept a loss of 50%, and banks must raise more capital to protect them against any future defaults. Leaders also agreed to boost the Eurozone’s main bailout fund to 1 trillion Euros ( £880 billon).

French president Nicolas Sarkozy described the plans as a “credible and ambitious response to the debt crisis”.

The finalization of a deal will come as good news to critics, who have accused policymakers of not doing enough to resolve the ongoing issues, which have futher contributed to problems and uncertainly.

The agreement will also come as a relief to Greece, as by agreeing to shoulder some of their losses, banks will help to reduce its debt down to 120% of its GDP by 2020.

Despite agreeing on the initial package however, leaders have still yet to resolve some of the finer details, which will be under consideration in the coming weeks.

Nonetheless, the news has already been given a cautiously positive response by markets and investors.

This was posted in Bdaily's Members' News section by Ruth Mitchell .