By James Bryce
EUROPEAN leaders have agreed a deal that they hope will solve the growing economic crisis in the region.
After 10 hours of talks lasting until 3am, a three-pronged agreement was reached which included the main bailout fund being boosted to one trillion euros.
As part of the deal, private banks holding Greek debt were forced to agree to a 50 per cent loss.
Banks will also be required to raise more capital to protect themselves from possible government defaults in the future.
For Spanish banks, this will mean having to raise a total of 26.2 billion euros by next June to reach the EU capital target of nine per cent of their assets.
The Greek government will receive a 100 billion euro bailout early in the new year, with hopes high that the deal will help to stabilise the markets.
Agreement was reached in a bid to prevent the crisis spreading to larger European economies such as Spain and Italy.