European Leaders Agree on Long-term Union

Brussels (AP) — European leaders have agreed to use the continent’s permanent bailout fund to recapitalize struggling banks, and agreed to the idea of a tighter union in the long term.

The bank decision at overnight meetings in Brussels on Friday was aimed at helping Spain, which sought a €100 billion rescue to help its troubled banks and is facing rising borrowing costs.

EU President Herman Van Rompuy called it a “breakthrough that banks can be recapitalized directly.”  He said leaders of the 17-nation eurozone also agreed to a joint banking supervisory body.     He said the leaders of the full 27-member European Union agreed to a general long-term plan for a tighter budgetary and political union.

EURO LEADERS RENOUNCE SENIORITY ON SPAIN LOANS
BAILOUT FUNDS TO BE USED FLEXIBLY, VAN ROMPUY SAYS
BANKS CAN RECAPPED DIRECTLY WITH AID FUNDS, VAN ROMPUY SAYS
EURO LEADERS AGREE TO OPEN FUNDS WITHOUT AUSTERITY PROGRAMS

The last 2 headlines  pretty significant as it may signal an expanded mandate of the bailout funds 

Source: IRESS