At long last, leaders of the Eurozone have reportedly agreed on a common stand to resolve the two-year old debt crisis in the region.

This caused stocks to reach the highest level in eight weeks with the MSCI All-Country World Index reaching a high 308.32, according to latest reports from Reuters.

After intense negotiations, the European heads are now passing on the bulk of Greek debt to banking institutions and have consented to reinforcing the European Financial Stability Facility.

There were mixed emotions with French President Nicolas Sarkozy announcing to media that their landmark decision will prove to be a big relief not only for European nations but for other countries worldwide.

The major point of agreement, based on reports from Reuters and Bloomberg, were the following:

  • Considerable Reduction of the debts of Greece
  • Increasing bailout package to serve as a $1.39 trillion firewall to prevent bigger economies from being pulled into the crisis
  • Sustaining commercial banks so these can absorb losses on Greek bonds

To attain the reduction, private creditors will be asked to shoulder the 50 percent losses on the said bonds.

The Institute of International Finance, which is representing the private creditors, announced that it is committed to work out a settlement based on this development.

The 50 percent cut is equivalent to a contribution of 100 billion euro for a second rescue of Greece although the Eurozone said it would spend part of the amount to guarantee the value of the new bonds.

People from all over the globe are now monitoring possible long-term effects of this decision by the European community.