The European Union has reached a three-pronged agreement it says is vital to resolving the Greek debt crisis.
The agreement was announced at the close of nearly 10 hours of summit talks in Brussels aimed at hammering out a package of measures to contain Europe's two-year debt crisis.
As part of the deal, banks have agreed to take a 50% loss on Greek debt. That removes a major obstacle in European efforts to stabilise the problem.
The announcement helped lift the euro as investors grew more optimistic about the outlook for the region's growth and its single currency.
German sources say chancellor Angela Merkel and French president Nicolas Sarkozy negotiated directly with representatives of the banking industry on the sidelines of the summit.
They also got agreement on recapitalising banks exposed to countries that might default, and moves to leverage the eurozone's bailout fund of €440 billion ($765 billion) up to €1 trillion ($1.7 trillion).