Perhaps it was the late hour, or the fact that the Polish presidency had closed the press bar at 11pm, but the journalists covering the summit initially greeted the announcement with scepticism. Many questioned whether the "bazooka" just unveiled really had the firepower to shield Spain and Italy from collapse. After all, this was not the first time the press had been held captive until late into the night in the Justus Lipsius building - or 'Just Lips' as I like to call it - to be told at the break of dawn that the euro would be saved. So in the end, was this just lip service? Or was this the decisive action the markets needed to see?
The agreement has three prongs:
- Private banks holding Greek debt will accept a loss of 50% on their Greek bonds
- The eurozone's main bailout fund (the European financial stability facility or EFSF) will be leveraged to €1 trillion.
- Italy will implement reforms to bring down the country's staggering debt, including a lowering of the retirement age.