After a long night of negotiation, EU leaders announced an agreement aimed at easing the two-year old debt crisis shortly before dawn in Brussels.
The agreement will make it possible for the European Financial Stability Facility (EFSF) and its successor the European Stability Mechanism (ESM) to lend directly to euro zone banks and, via the European Central Bank (ECB) , buy euro zone bonds in the primary and secondary markets.
The conditions of any support remain unclear, with the European Commission talking about “very strict conditions” but Italian Prime Minister Mario Monti saying any support would not require those accepting it to accept similar bailout terms to those offered to Greece and Portugal.
"In order to ensure an efficient management, the EFSF and ESM will buy and sell in the bond market” with the support of the ECB because the central bank has the "knowledge of market conditions and an operational capability that the bailout funds don't have,” Monti said in Brussels.
A 20 billion euro ($25.1 billion) growth fund was also agreed, but analysts were quick to point out that many questions remained unanswered.
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