European leaders reached a "breakthrough" deal early Friday to ease the recapitalization of struggling banks that should help draw the eurozone back from the brink of a gathering crisis.
Under the deal, European leaders agreed to create a single supervisory body to oversee the eurozone's banks which could use the single currency area's rescue funds, the European Financial Stability Facility or European Stability Mechanism, to aid banks directly without adding to governments' debt.
European Union leaders are hoping for implementation of the agreement by July 9, an EU statement said.
The deal means Spain's formal request this week for eurozone bailout funds to recapitalize its troubled banking sector will not add to its sovereign debt. Madrid had feared the increased debt load would send its borrowing costs even higher.
Ireland, which hopes to rework the terms of its bailout deal, and Italy, which like Spain is battling with spiraling government borrowing costs, could also benefit from the new deal.FULL STORY