The measures agreed by the earlier Thursday by the EU finance ministers had been the subject of months of intense haggling.
First, finance ministers from the 27 EU countries negotiated through the night to agree to give the European Central Bank oversight of their banks. That is a key component of what many hope will eventually become a full-fledged banking union â¿¿ a single rulebook for all banks and coordinated plans for helping lenders in trouble.
Crucially, the single supervisor paves the way for Europe's bailout fund to give money directly to struggling banks, without dragging governments into the mess.
Then, the 17 EU countries that use the euro waved through a total of â¿¬49.1 billion ($64 billion) in bailout funds for Greece, â¿¬34.3 billion of which will be disbursed in the coming days.The funds are vital because Greece needs the money to stay afloat and avoid a calamitous default. But the deal is also important for the other 16 countries because disagreement over how to handle Greece had raised fears that a default would bring down the entire currency union. Dealing with the connection between banks and government debt â¿¿ a toxic loop that has forced several countries to ask for bailouts after they tried to rescue their banks â¿¿ also addresses a major cause of the region's financial crisis. "The crisis came by way of the banks and now a tool is in place so that nothing will be like it was before," declared French President Francois Hollande on his way into Thursday's summit. However, serious challenges remain: The economy across the eurozone is in recession; unemployment is rising; and in recent days, industrial production and retail sales have fallen further than forecast. And while leaders have reached a couple of significant agreements this week, there are still some tough problems to crack.