European Union reaches key agreement on Greek debt

The European Union has reached a "three-pronged" agreement it says is vital to resolving the Greek debt crisis.

As part of the deal, banks have agreed to take a 50% loss on Greek debt.

That has removed a major obstacle in European efforts to stabilise the problem.

The announcement helped lift the euro as investors were more optimistic about the outlook for the region's growth and single currency.

"The result will relieve the whole world that was expecting a decision that was strong from the eurozone," French President Nicolas Sarkozy said at a press conference in Brussels.

SEE BBC: European Union reaches key agreement on Greek debt