EU Reaches Debt Deal

Sigh of relief. Markets arounded the world reacted with glee to news that the eurozone has finally reached a deal on its debt crisis. In the U.S., the Dow surged over 300 by the early afternoon, breaking 12000. After months of failed negotiations, European leaders agreed to a three-part plan in which banks take 50-percent losses on the Greek bonds they hold, European banks are required to have more money on hand, and the bailout fund is reinforced. Greece will get 100 billion euros in new loans. The Institute of International Finance, which has been negotiating on behalf of the banks, said it was committed to working out an agreement on the debt reductions, but that it would be a challenge to ensure private bondholders will fall in line. French President Nicolas Sarkozy said that the decision will “relieve the whole world.”