BRUSSELS — In the face of pressure from the embattled euro zone countries Italy and Spain, European leaders agreed early Friday to use the Continent’s bailout funds to recapitalize struggling banks directly, cheering financial markets but prompting unease in Germany, whose taxpayers may face more risk.
Jose Barroso, president of the European Commission, after leaders of the 17-nation euro zone agreed on a deal that would help banks without adding directly to the sovereign debt of countries.
Stocks and the euro opened strongly higher in Europe and were still rising through mid-afternoon — a clear suggestion that the summit, by breaking new ground, had exceeded expectations. Analysts cautioned that earlier summit agreements had prompted market rallies that proved short-lived.
The decision, by leaders of the 17-nation euro zone, would allow help to banks without adding directly to the sovereign debt of countries, which has been a problem for Spain and potentially for Italy. Both countries have seen the interest rates on their debt rise to levels that would be unsustainable in the long term, and the Italian and Spanish prime ministers, Mario Monti and Mariano Rajoy, came here to push their colleagues to help.
Though the German chancellor, Angela Merkel, made concessions, they came with conditions, and some of the detail remained unclear Friday, prompting calls for more clarity to be provided quickly.
The deal was struck after the Italian and Spanish leaders said they would block all other agreements — on a 130 billion euro or $163 billlion growth pact, for example — until their colleagues did something to help take the pressure off the third- and fourth-largest economies in the euro zone.
If their countries could not go to the markets to roll over their debt, Mr. Monti and Mr. Rajoy argued, there would be an existential threat to the euro in the short to medium term.
Spain is seeking 100 billion euros to recapitalize its banks, damaged by a property bubble.
Mr. Van Rompuy called the agreement a “breakthrough that banks can be recapitalized directly,” which represents a concession by northern European countries, including Germany.
As a condition, though, the leaders agreed that the euro zone’s permanent bailout fund, the 500 billion euro European Stability Mechanism, due to come into being next month, could act only after a banking supervisory body overseen by the European Central Bank had been set up. That should happen by the end of the year, Mr. Van Rompuy said.
François Hollande, the French president, said Friday that the agreement offered a number ways to give troubled economies the rapid assistance that they had been seeking.
“It’s very important that we put into motion procedures for immediate action — that was something much hoped for,” he said. “Bank supervision for a recapitalization of the banks will take a bit more time, but this is a move in the right direction.”
“To have defined a vision for the economic and monetary union” was a fundamental step toward answering the question “what we do we want to do together,” Mr. Hollande said.
Graham Neilson, chief investment strategist at Cairn Capital, an asset management and investment company in London, noted that while the agreement represented progress, some fundamental issues were not addressed.
“The burden of future risk is being shared more widely, meaning the chances of a euro zone breakup have been lowered for the short term,” he said. “But at the same time, the longer-term ante is higher for all involved and the root causes of the structural imbalances remain.”
Ms. Merkel has argued that risks could only be pooled among euro nations if decision-making on key issues were also shared. She insisted that the decisions in Brussels were based on Germany’s basic philosophy of how to solve the crisis, through a series of checks and balances, with rewards for meeting conditions that are governed by a strict set of controls.
Unease emerged in Berlin, however, over the extent to which the principles of the euro zone bailout fund, the E.S.M., had been altered from the original agreement that is to be put to vote in Parliament later Friday.
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