Eurozone agrees on bank recapitalisation
29 June 2012
Mr Rompuy hailed the deal as a “breakthrough”
EU leaders have agreed to use the eurozone’s planned bailout fund to directly support struggling banks, without adding to government debt.
After 13 hours of talks, they also agreed to set up a joint banking supervisory body for the eurozone.
Spain and Italy put pressure on Germany to allow the bailout fund to buy government debt in the markets - a measure to contain borrowing costs.
Eurozone leaders agreed to begin implementing the decisions by 9 July.
However, it could take until the end of the year before the new money becomes available.
Announcing the deal, EU Council President Herman Van Rompuy said it would break the “vicious circle” between banks and national governments.
The euro surged against the dollar in Asian trade after the news from Brussels. Stocks in Germany and London also rose sharply.
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