Markets surge after summit

euro bailout fund and pushing banks to share the pain at a marathon summit.
After days of talks and two successive summits in Brussels that dragged on for almost 10 hours, German Chancellor Angela Merkel declared: “We have done what needed doing.”
European shares surged and the euro rose on the announcement with stocks in Germany and France rising well past three percent. Asian markets also rallied with Hong Kong closing up 3,26 percent and Tokyo gaining more than two percent.

The euro, whose value often corresponds with the highs and lows of eurozone drama, also gained.
With the deal reached, IMF chief Christine Lagarde welcomed “substantial progress”, but European Central Bank chief Jean-Claude Trichet warned that “all of this now requires a lot of work and a lot of quick work”.
In Paris, French Finance Minister Francois Baroin said “last night’s deal is an ambitious, comprehensive and credible response,” but in other world capitals, the reaction was more muted.

Russia said the deal was grounds for “cautious optimism” and adequate to hold off dangers for several months while China said it had faith in the eurozone and confirmed that President Hu Jintao would speak to his French counterpart Nicolas Sarkozy later yesterday.
And Beijing, like Moscow, reitreated it would likely take an important role in boosting the European rescue fund through the IMF, in a sign that emerging economies plan on assuming a larger role in the world economy.

As talks dragged on in Brussels, the last and perhaps toughest chapter in the four-point plan was a deal between eurozone leaders and the Institute of International Finance banking lobby to force private investors to take a 50 percent loss on Greece’s debt.
In a dramatic development, French President Sarkozy and Merkel broke off from the summit to save the day and cut a deal with the head of the banking lobby, Charles Dallara.

“We said it was our last word, our last offer,” said Merkel of threats to allow Greece to default failing agreement.
The banks in past weeks had raised their offer to 40 percent but governments insisted on a 50-percent “haircut”. – AFP.