Italians woke up wondering whether their country had just become a Brussels protectorate. This morning's statement invites the Commission to provide a detailed assessment of the measures pledged by Silvio Berlusconi's government in a letter delivered to the summit "and to monitor their implementation". Radio 24, the station owned by Italy's bosses' union, said on its morning news it amounted to putting the country into special administration. The other focus was on the reaction of the unions to a promise in the letter to make it easier for employers to fire workers in times of crisis, either for their firm or the economy. Raffaele Bonanni, head of the moderate, Catholic-oriented CISL trade unions federation, called it "an incitement to revolt". Silvio Berlusconi somehow found time to do a quick interview with a late-night TV chat show in which he claimed Angela Merkel had apologised to him for the now-famous "smirks" between her and Nicholas Sarkozy last weekend when asked about their faith in Italy's ability to deliver on its undertakings. But Steffen Seibert, Angela Merkel's spokesman, flatly contradicted him on on Twitter saying there had been no apology "because there was nothing to apologise for". At all events, the rift with France remains and is motivated more by Lorenzo Bini Smaghi's refusal to leave his seat on the ECB board where Italy will soon have two seats while France remains unrepresented. Italian reporters noted Sarkozy avoided any contact with Berlusconi last night, and the prime minister himself admitted he had been unable to speak to the French president. In his TV interview he appealed to Bini Smaghi to step down.The overcapitalizing of Europe's banks will not in itself solve the sovereign debt crisis. However, this plan is set within a timeframe that should enable them to determine how best to strengthen their capital positions in ways that treat all stakeholders fairly and allow the banks to fulfil their role in supporting Europe's economic recovery. The hardest bit of the deal was Greece, whose debts are on track to balloon to 180% of GDP by 2020. To reduce this to 120% of GDP, private creditors will be asked to accept 50% losses on the bonds they hold. The Institute of International Finance, the banks' lead negotiator, said it was committed to working out an agreement based on that "haircut". But the challenge now will be to ensure that all private bondholders fall in line. The 50% cuts equal a contribution of €100bn to a second rescue for Greece. The details are yet to be worked out, and the move has been sweetened by the inclusion of a €30bn contribution from euro zone member states to guarantee the remaining value of the new bonds.
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03:39 French president Nicolas Sarkozy says the deal will make investors more optimisitc about the outlook for the region's growth.
The result will relieve the whole world that was expecting a decision that was strong from the eurozone.
03:31 EU President Herman Van Rompuy has said that the deal will reduce Greece's debt to 120pc of its GDP in 2020. Under current conditions, it would have grown to 180pc.
Mr Van Rompuy also said the eurozone and International Monetary Fund - whose loans have been propping up Greece since May 2010 - will give the country another €100bn (£88bn).
03:20 BREAKING Officials in Brussels have said an accord has been reached with banks on a 50pc write-off of Greek debt, and they had also approved a complex mechanism for "leveraging" an existing bailout fund to boost its firepower.
03.10 Good morning and welcome back to our live coverage of the continuing global debt crisis, as an agreement at the eurozone summit gets closer. Log on throughout the day for the latest news and views.
Read all our latest news on the financial crisis, or take an in-depth look at events over the past month
Bit like giving birth - the massive expectation has to end up in smiles all round .
Yesterday the Governor Mervyn King told the select committee that these eurozone bail outs only treat the symptoms and are not the cure , He said this will give them breathing space of one or two years . He is right . The weaker eurozone economies will continue to struggle because they are trapped in a strong currency . The euro is still the worlds premier currency - it will replace the dollar as the reserve currency in years to come . However the weaker euro economies cannot get export driven growth . German exports are globally competitive at current exchange rates and surprise surprise Germany is the only low debt strong economy in the eurozone . The cure to the problem is somehow to get all eurozone economies trading at an exchange ratethat suits them , Fiscal integration does not seem to be on the menu in the short term .
I need a Break!!
Why do they keep on talking about it? I also wondered why.
Just like you, I was also puzzled every time they try to conceal it when they include it
In the topic. All I know, This is the place for cheap breaks...
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08.40 Robert Peston of the BBC has broken out how much banks of the various countries need to raise in the coming months.
Some of them will be running to the bail-out fund for help almost at once. But it's a rare piece of good news for Britain! He tweets:
In strengthening banks, Greek banks to raise €30bn, Spanish €26bn. It €15bn, Fr €9bn, De €5bn, UK 0. Much from EFSF
08.30 Champagne corks are popping in European markets this morning, with all the indices up strongly.
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The FTSE 100 is up 1.9pc at 5,659 points, while the CAC rose 3.2pc in Paris and the German DAX also climbed 3.2pc. The MIB, the Italian stock market, added 3.1pc.
Despite the 50pc losses on Greek government debt which will be forced through as part of the plan, French banks were particularly jubilant, with Societe Generale leaping 9.8pc, Credit Agricole jumping 9.5pc and BNP Paribas rising 9pc.
In typical European fashion, a summit deal which seemed out of reach at midnight last night was triumphantly unveiled at 4am. The deal does not, and was not intended to, have any effect on the core problems facing the eurozone. There is still an urgent need to restore growth to economies which are hamstrung by uncompetitive business sectors, and continuous fiscal tightening. Recession still looms, especially in the southern economies.
What the deal is intended to provide is adequate medium term financing for sovereigns and banks which have been facing urgent liquidity problems. On that, it is notable that the summit has not really raised any new money, apart from an increase in the private sector's write-down of Greek debt by some €80bn.
All of the remaining "new" money, including €106bn to recapitalise the banks and over €800bn to be added to the firepower of the EFSF through leverage, has yet to be raised from the private sector, from sovereign lenders outside the eurozone, and conceivably from the ECB.
There is no guarantee that this can be done. The eventual out-turn of this summit will depend on whether this missing €1,000bn can actually be raised.
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