EU leaders agreed on a solution to resolve the debt crisis(Mian Shakeel Aslam)

Mian Shakeel Aslam --- Union leaders announced an agreement Thursday to take on the steps of the debt crisis, including an agreement in conflict with private investors at a loss of 50% of Greek bonds.

The agreement came at the end of marathon talks, the details of a global political response of the public debt and banking problems are threatening the stability of the euro and the global economy to be completed.

The answer points to solve three problems: the debt crisis in Greece, instability in the banking sector rescue fund, and a very outdated.
Under the new plan, the Greek bondholders voluntarily reduce the value of Greek bonds by 50%, which translates into € 100 million and reduced the burden of national debt to 120% of economic output by 150%.

Charles Dallara, head of the Institute of International Finance, the private sector in the talks, welcomed the agreement. In a statement, said that private investors will accept the reduction of 50% ", with the assistance of € 30 billion" package from the official participation of the private sector.
The agreement also provides for the establishment of a new funding program with the International Monetary Fund worth up to € 100 million, according to a statement.

Stronger the rescue fund: The two leaders agreed on ways to rescue the firepower of the EU funds, such as the European Financial Stability Fund to increase known. The methods take the bottom four or five times, the statement said, increasing its resources to one billionth of about €

The fund will provide for the treatment of partial new issues of government bonds. They are the creation of one or more Special Investment Vehicles, which is complemented open to the private sector players such as sovereign wealth funds.

China has already expressed interest in supporting the special investment mechanism expressed. The possibility that China could back the bailout helped lift U.S. share prices on Wednesday.

Huge reserves of the banks: the State and also agreed to increase capital requirements for banks vulnerable to losses of government bonds in the euro area.
"The main aim of the exercise is to promote confidence in the banking sector," said European Council President Herman Van Rompuy.
Banks would be forced to dramatically reduce the level of core capital by 9% increase on a cushion against potential losses to produce.

Based on market rates in September, the banks must raise total of 106.000.000.000 € to achieve the new targets, according to the European Banking Authority.
This is comparable to estimates by the International Monetary Fund and the private sector economists in the range between € 100 and € 300,000,000,000th
The banks will have to meet these new requirements, according to a statement by the end of June 2012.

Jose Barroso, President of the European Commission, said that the technical work necessary to accomplish the actions will be completed "in the coming weeks."

"The key is implementation," said Barroso. "There is not enough to make commitments."

Posted BY: Mian Shakeel Aslam

Source: http://money.cnn.com/2011/10/26/news/international/european_union_crisis_summ...