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From NPR News, this is ALL THINGS CONSIDERED. I'm Audie Cornish.
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And I'm Melissa Block. For once, we have what looks like good news from the eurozone. At least that's how the financial markets view it. Markets shot upwards today after European leaders reached a deal to help Spain and Italy survive the region's financial crisis.
The agreement came at a summit in Brussels. NPR's Philip Reeves was there.
PHILIP REEVES, BYLINE: The eurozone's troubles are not going away. Two of its heavy hitters, Italy and Spain, face borrowing costs they just can't afford. Some say, if those costs are not brought down soon, the single currency union could crash. The ripples from that would be felt across the planet. Everyone agrees that time is running out. As they rolled in for yet another Brussels summit, Europe's high command said this time they'd achieve something significant.
The Spanish and Italian leaders made clear they need emergency help and they need it now. Germany's Angela Merkel didn't seem keen, yet they weren't going to leave until they got it. This time they had the backing of France, Germany's old partner. The strategy seemed to work. Europe's policymakers said real progress was made.
JOSE MANUEL BARROSO: We have taken decisions that were unthinkable just some months ago.
REEVES: That's Jose Manuel Barroso, president of the European Commission. This is the 20th summit since the eurozone crisis began three years ago. Herman Van Rompuy, president of the European Counsel, refused to be drawn over whether this summer was, as many said, a defeat for Germany's Merkel.
HERMAN VAN ROMPUY: It was a tough negotiation. It took hours and you can't summarize this in winners and losers.
REEVES: Van Rompuy said saving the eurozone is not about who's won or lost.
ROMPUY: We have a common task, a common mission to stabilize the eurozone, and in order to stabilize the eurozone, we have, in some way, to support countries under market pressure, but those countries have also to deliver. They have also to deliver.
REEVES: Until now, Germany and France called the shots in the eurozone. They're the two biggest players, but with the arrival in office of France's socialist president, Francois Hollande, the power equation has changed. The French are backing their Mediterranean neighbors, leaving German wielding great power, but in isolation.
The summit agreed on a number of measures, some big, some small. Crucially, they're going to establish a single supervisory body for banks across the eurozone by the year's end. That's a significant step towards a banking union and towards fiscal and political union in Europe.
Italy will also be able to borrow money from the eurozone's Rescue Fund without necessarily having to submit to a harsh, internationally-monitored austerity program.
At bottom, this summit was about quick fixes aimed at restoring market confidence. Eurozone leaders agreed, with conditions, that Spain's recent big bailout might not have to be chalked up to the government's books after all. The money, in future, can go directly to the banks. For the recession-hit Spanish, that's a big victory. One reason they were paying punishing interest rates was because that loan was added to their national debt.
PETER SPIEGEL: We always have said this is about governments outspending their limits. Actually, for a lot of these countries, it was not about that at all.
REEVES: That's Peter Spiegel of the Financial Times.
SPIEGEL: For countries like Ireland and Spain, these were old school banking crises. This was a bank bust, overinvested in property market and they went boom. And when national governments have to bail out these banks, suddenly they are loaded up with a huge amount of bank debt. They have to pay to shore up these banks.
What they have decided now is Ireland and Spain don't have to pay the bailouts of the banks. The European Rescue Fund had to do that.
REEVES: Philip Reeves, NPR News, Brussels.
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