Euro zone leaders said on Thursday they had reached agreement after late-night talks on a comprehensive package of measures to tackle the euro zone's sovereign debt crisis.
The deal calls for private owners of Greek bonds to accept a 50 percent writedown on their investment. The scope of the new version of the euro zone's rescue fund would be increased substantially and equivalent to about 1 trillion euros.
Following is a selection of comments from analysts, experts and political figures.
WORLD BANK PRESIDENT ROBERT ZOELLICK
It's a very welcome and an important step because we have seen the ripple effects.
I compliment the leaders of the European Union for facing and making difficult decisions. Of course problems like this can't be solved by waving a magic wand, and the implementation of the three core elements will require follow through to ensure that with the market reactions, the banks can function more effectively and to ensure that euro zone countries are able to roll over their debt.
I'm hopeful that this first important step will lay the foundation for a broader approach that will focus on helping the world economy resume growth, overcome joblessness, and support the innovations so we can get the world economy back on track.
DAMIEN BOEY, EQUITY STRATEGIST, CREDIT SUISSE, SYDNEY
While the headlines look good, the devil is in the details here. It's great news that they've managed to increase the bail-out fund to 1 trillion euros plus agree on some sort of haircut arrangement for the private investors in Greek debt.
The problem is, we don't actually know how they are planning to increase the bail-out fund size from 440 billion euros to a trillion. On top of that, there are some questions as to whether one trillion euros in itself is enough.
If you had one trillion euros and you had the ECB on board, that would be enough. But there's been no announcement that the ECB's on board so far. If the ECB is not actually willing to use its own money to prop up the bail out fund .... then there's a problem. This plan actually doesn't work.
CANADIAN PRIME MINISTER STEPHEN HARPER
I see as positive steps, the actions taken by our European friends just a few hours ago, Harper said in the Australian city of Perth, where he will attend a summit of Commonwealth country leaders.
Of course, we still await the elaboration of further details and successful implementation, as we approach the G20 summit (next month).
PHILIPPINE CENTRAL BANK GOVERNOR AMANDO TETANGCO
(The) market has welcomed the move ... The agreements are comprehensive, but require the cooperation of the European leaders, multilateral agencies like the IMF, and the private sector.
The burden sharing has been laid out, but this, I believe, rests quite firmly on what the statement calls 'reaffirmation of the inflexible determination' among member states to honour all their commitments to sustainable fiscal conditions and structural reforms.
This confidence is vital in ensuring the speedy normalisation in the markets. This morning we saw broad positive reaction from the market. But as they say, the proof of the pudding is in the eating. We are nevertheless hopeful the measures would be sufficient, at least, in shoring up confidence and calm in the markets.
THOMAS LAM, GROUP CHIEF ECONOMIST, OSK-DMG, SINGAPORE
The headlines provided some solace to the market. We've moved from a point in time when we were wondering whether we'd get anything from this meeting.
The markets reacted positively. Broadly, it's still pretty incomplete. There are numerous moving parts to the euro zone situation. Hence, it must be a continuous process. While the Europeans appear to be getting the ball moving in the right direction, it is extremely dangerous to be complacent at this time.
Key things to watch out for are the state of the euro zone economy, the political backdrop and the ECB's role. If the euro zone economy weakens, costs would rise. If we get more uncertainties with regards to the political leadership, it could affect the plan. The ECB's role must also be clarified.
JEREMY FRIESEN, COMMODITY STRATEGIST, SOCIETE GENERALE, HONG KONG
If they extend the EFSF, that's obviously positive and will reduce some of the risks that we have in the European market. Anything they can do to create consumer power and growth would translate into better commodities prices.
It will be too optimistic to hope for any quick solution as fiscal issues still need to be dealt with in Greece and Italy, but it looks like the Europeans are treating this seriously.
In the near term, credit and default risks are being navigated by EFSF. Recession issues could continue to linger and that will weigh on commodities market for a while.
In a note, Barclays Capital said the summit has not yet produced measurable results or at least notable progress on various issues of key importance.
For instance, news on the leverage of the EFSF has been patchy at best and it remains to be seen what the final agreement on this might be.
Finally, while the government of Italy has reportedly indicated further reform efforts in a letter to the European Commission uncertainty remains about the degree of political commitment of the incumbent government.
Therefore, in sum, financial market participants are left with a number of important open questions and satisfactory answers have yet to be provided by the authorities.
YUSUKE SETA, COMMODITY SALES MANAGER AT NEWEDGE JAPAN I am a little doubtful about the EU being able to arrange the $1.4 trillion loan. However, the market should be relieved from concern over the debt crisis.
This could be bullish for commodities and is supported by strong equity markets, but I bet this won't last long.
TILAK DOSHI, HEAD OF ENERGY ECONOMICS, ENERGY STUDIES INSTITUTE, NATIONAL UNIVERSITY OF SINGAPORE
I think the fundamental problem is whether the haircut to be imposed on banks that bought Greek bonds at 50 percent is enough.
Aren't the markets pricing the required haircuts at 60 percent? Who is going to share in the costs of re-capitalising banks? And with increased fire power, the question is whether they can segregate weak euro zone economies such as the PIGS, and whether Italy in particular can come up with credible plans to improve its debt and productivity levels in time.
(Compiled by Asia Desk)