good afternoon from cnn hong kong. i'm andrew stevens. >> and good morning from london. i'm felicia taylor. it was a long time coming, but european leaders filly got there. shortly before 4:00 a.m. in brussels the announcement we'd all been waiting for. european leaders struck a deal on the eurozone debt crisis. here are the key points. the agreement includes a compromise with private investors. holders of greek bonds have greed take a 50% write down on the value of those assets. also the effective strength of the bailout fund will be boosted to about a trillion euros. but european banks will be told to brace for further turmoil. the banks zill to increase their capital reserves to 9% to protect themselves against potential losses following those write downs or defaults that possibly could occur further down the line. >> at a press conference in the early hours of the morning in brussels, the european council president emphasized the need for tighter fiscal discipline within the eurozone. >> today we decided to go even beyond to the legislation on some points as of no. we also approved ten measures to improve the governance of the euro area. different other ideas have been suggested to reinforce fiscal discipline. therefore, the euro summit decided to reflect on a further strengthening of economic convergence within the euro area on improving fiscal discipline and deepening economic union. including exploring the possibility of limited changes. the full european council will revert on this issue in december on the basis of an interim report in close cooperation with president ba barroso and the president of the group. it will be finalized by march 2012. we did not want to repeat some of the errors of the recent past. in taking today's decisions, we laid the foundations for our future. all members of the euro summit are determined to follow this path. >> followed every twist and turn of the negotiations from brussels. in the early hours wrapped up the day's proceedings for us. >> reporter: after 11 hours of negotiations near brussels, eu leaders did finally manage to come up with what they call a lasting and credible agreement to solve the eurozone debt crisis once and for all. and here it is. in this 15-page draft communique that was released soon after they wrapped up their talks it aims to tackle three problems together and all three unprecedented in their complexity. now these leaders decided to boost the eurozone firepower or efbf, the euro fund bailout fund and prevent countries like italy and spain from being infected by the same issues. also, another particularly sticky point of discussion that took hours of negotiating was the issue of agreeing to a haircut or write down with private bondholders that owned greek debt. they managed to push through proposals for a voluntary 50% hair cut with those investors. and last, but not least, the banks that have had people worried for quite so long seem to be the last of these ministers' problems. they managed to push through early in the negotiations plans to recapitalize the european banks to the tune of 106 billion euros. the question is, will it be enough, and how long will it take to put into place? nina dos santos, cnn, brussels. >> so let's take a look from the perspective of investors. the initial reaction on the stock market looks very positive. for longer term reaction we need to look at the bond markets. bond yields are key tonding how the deal is playing out. do investors have enough confidence in this deal to let yields fall in some of the most troubled countries? if yields are on the rise it shows a lack of confidence in the deal. let's look at where some of the bond markets stand. we can begin in france where we're seeing seven basis points increase. and nauls -- let's go to italy. italy also up fractionally up eight basis points. that brings the yield down to near 6% which is significant in italy. at the beginning of this year, the yield was at 4.8%. this is a very dangerous level to get near, the 6% level. that's where italy doesn't want to see things go. it needs to stay below 6%. let's go to germany. the reaction there also similarly understandable because we're obviously seeing a positive reaction in the bond market so far. but this isn't a huge move for the bond market. i can show you in perspective what it means for greece. that is coming down ever so slightly at 23.30% but is a reflection of how uncertain the market certainly is about the situation in greece. and a very slight reaction in the uk of a drop of four basis points but that's not a big deal either. very muted reaction. if we take a look at the comparison of how these all look together, things have begun to moderate ever so slightly. it's italy that's of most concern as that edges ever closer to 6%. and that could be a problem if we see that go in the next couple of weeks showing that there's still concern around some of these countries that they haven't actually been ring fenced in this deal to protect some of the more troubled economies. andrew? >> absolutely. italy certainly the big key in all of this. here in asia, given the first chance to react to that news coming out of the eurozone in the early hours of the asian morning, and it was pretty positive, too. more on the numbers in just a bit. first, news from herman von rompoy's twitter page. agreement on a comprehensive package reached at today's euro summit just finished. markets did move higher. i'll give you the broad numbers in a moment. i want to gauk some of the asian banks gaining. bank shares in hong kong also buoyed by some earnings reports. releasing q3 results before the market closed on wednesday. agricultural bank of china. 40% up on a year early and the stock reacting up by 6.5%. china civic up 41% on the year. but bank of china is a 9% profit rise which is well below the forecast. still the stock was up by 2.2%. so let's take a look at what it means for the bigger picture across the region. and it really was a big deal on the broader markets as a result of what happened in the eurozone. the nikkei up two. hong kong really powering ahead. it was after the afternoon session, for the afternoon session. the market up from 1.72, nearly 3.5%. shanghai lagging just about 0.3%. one other major market mover was olympus. its stock up by 23%. we'll have more on that a little bit later in the show, felicia. >> many of the talking heads in brussels were at pains to tell investors the eurozone deal will finally offer some stability in the marketplace. it seems investors are encouraged by the progress in belgium. in london, the ftse 100 up over 2%. the xetra dax up almost 3.5%. in paris, up 3.6%. the bank stocks have been doing incredibly well today. they are up between 8% and 9%. societe generale, deutsche bank and the zurich smi not reacting quite as much but up 1.75%. the euro naturally hit a seven-week high against the u.s. dollar on thursday. this coming after the eu leaders and banks agreed to the 50% write down on the value of the greek debt. the yen was stronger against the dollar. here the currency markets look overall. euro 1.40 and against the british pound at 1.60 and the yen around 75. not much of a move there. andrew? u.s. market looks set for a stronger open when trading begins there in about five hours. let's look at the futures in the premarket. right around the world, shares responding positively as the euro currency has done to the headline news coming out of europe that there has been agreement reached and some big numbers flirting toornd get the eurozone basically its economic picture back on an even keel. felicia? >> the debt crisis deal in europe may have given a welcome gooft t boost to the markets but how long is it going to last? we're joined by the co-head of european economic research at deutsche bank. were you satisfied with this deal? it was only a 50% haircut. some were looking for much more than that. >> well, but at least it gives greece a fighting chance. if we manage to bring public debt in greece within the next few years -- it would put greece in the same bracket as belgium and italy which in the past have proved it's possible to bring back euro debt to much more sustainable level, provided you've got decent nominal growth. so the difference between now and where we were just before is that at least it looks doable. and to get the kind of support you need in the country itself to go through the adjustment, this is immensely important. i mean, how can you convince people to consent to the kind of sacrifices they have to consent to if any way it looks impossible to achieve. >> you mentioned bringing the debt down to 120% but that's by the end of the decade. is that really good enough? couldn't we have achieved this a little more effectively in a sooner time frame? >> well, if you look at the current trajectory of greek public debt, at least according to the imf, we could be in the figures of more than 160% of gdp very, very fast. and this is absolutely impossible to control. so again, it's not great. it would be much better if we could get it below 100%. that's clear. but it's as good as it's doable because the other option was to get into hard restructuring which would have sent basically another shockwave in the financial system. here what we have, at least of today, is a voluntary agreement which is controllable in terms of central second-round effects. so it's a balanced deal and that is probably the best we can say at this stage. >> and what does this mean for other troubled economies such as italy and spain. have they been ring fenced by any of this? should we still be concerned about those european economies? >> of course we need to be concerned. the adjustment on the entirety is daunting but what we have right now is a system with the fff which looks much more powerful than what we had in the past few weeks. what we need to make sure is that we have enough support from non-europeans, enough support on the private sector to participate in all of this. on paper it looks able, yes, to ring fence countries such as spain and italy, provided these countries continue to deliver. and i think that one of the byproducts of last night's agreement is also this acceleration in the social reforms pledged by italy. we'll have to monitor the implementation, of course, but it's much better or at least in terms of intentions than what we could have expected a few weeks ago. this very complicated, cumbersome process seems to be yielding some effect. again, we need to wait to be sure that it tracks enough confidence from the rest of the world and that will be decided probably in the next few weeks. and an important date will probably be the g-20 meeting on the 3rd of november. but the ground is laid, and pretty positively. >> a deal is a deal. that's a very good thing. gilles moe of deutsche bank, thanks for your perspective. we've got plenty from brussels following the announcement of that plan to get on top of europe's debt mountain. but how will things play out in the eurozone's two biggest economies which between them basically underwrote the debt deal? 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>> people are worried but first and foremost it seems people are quite satisfied with the deal that happened. if you look at yesterday when we were looking at the german parliament and the things they were trying to get passed there, you look at the blueprint that angela merkel went to brussels with. that's almost exactly what she achie achieved. one of the things people were talking about is write downs on greek debts would have to be up to 60%. now they've achieved 50%. certainly a lot of satisfaction there. angela merkel seemed very satisfied when she went to a press conference after the summit meeting. let's listen in to one thing she had to say. >> translator: we've had long and intensive but fruitful discussions. first within the framework of the 27 countries and then within the 17 countries. i'm aware and everybody was aware that the whole world was looking at this meeting, that we can show the world how we can guard ourselves from this deep economic crisis. i think tonight we europeans have taken the right measures. >> one of the things evident in that press conference, andrew, was there seemed to be a smirk on angela merkel's face when asked about whether or not she had to arm twist the banks in europe into accepting that deal. that seemed quite interesting. you look at the german public, the one thing they are obviously worried about is whether the tax dollars or tax euros could be lost. certainly there are people who believe the risk of that, especially with these new leveraging instruments in place could be bigger than was before. andrew? >> fred, thanks very much for that. from berlin to paris and jim bitterman. the french banks have been under all sorts of pressure because of their exposure to what's been happening in greece in particular. many of those banks to to v to wear a 50% haircut. how is that going down and what sort of impact is it going to have on the banks? >> well, that's a good question. basically if you take a look at the total debt that the french are holding, about 54 billion euros in debt. if you take 50% of that, 27 billion euros shortfall for those banks in terms of their income for the year. it comes from reduced dividend, reduced pay, for instance. it could come from recapitalization in the private sector of those banks. so the banks will be looking for capital everywhere. the one question that remains to be seen is will it reach the consumer. will the banks raise their fees? will the banks raise their mortgage rates, that sort of thing. president sarkozy is going on television tonight. he's at the start of a 2012 election campaign. and my guess is he's going to start off by assuring the french consumers and the french voters that they are not going to pay the price for this. we'll see what happens this evening, but basically, i think there's a lot of concern about what could happen, whether or not it will happen is another story, andrew. >> absolutely. i think that's the line that's being repeated everywhere. we'll just have to wait and see what's in the details and how it all falls out on that one. jim bitterman joining us live from paris. you're watching "world business today." still to come, how europe's biggest companies are reacting to news of the bailout deal. it's come right in the heart of earnings season. one of germany's leading executives gives us his take on the breakthrough in brussels. stay with us on cnn. welcome back. you're watching "world business today" on cnn. if you have just joined us, you are watching our continuing coverage of the eu bailout deal that was finally reached in the early hours of this morning in brussels. certainly down to the last minute. the final wire, felicia. >> andrew, i like the way you emphasize finally because that's certainly expression of what all of us have been feeling. it's an ongoing crisis that's been continuing for the last two years. whether or not the austerity measures in greece would take place. we have yet to see whether or not that is going to happen and also how exposed are the many european banks, as well as the u.s. banks to this debt crisis. let's take a step back for a minute. how did we actually get here? fionnuala sweeney breaks down the problem, what caused it and the widespread fallout. >> who is in criseis? well, everyone is in crisis. it's not just the eurozone countries but the european union and if the european economy goes south then the rest of the world economy goes south, and it's already in trouble. it began with really the increase of level of debt of countries, of individuals and countries, of borrowers from banks. and in greece's case and other countries in the european union and the eurozone, the debt became too high to sustain. essentially it's all about greece at the moment and its flailing debt. other countries are in trouble, too, but the main architects of the euro and the euro's recovery are france and germany. of course, the real difficulty here is that they have been deemed to be seen as being slow in trying to get a rescue package for the future for the european union and the eurozone specifically. and the markets haven't been liking what they've seen so far. they say they want an agreement. they say they are working on it, particularly when it comes to shoring up the capitalization fund for the banks. but the markets have yet to be convinced. the difficulty for the eurozone countries is that in order to continue to rail aga