The European Council agreed on a package for Greece and changed the rules of the EFSF; initial market reaction was euphoric as Spanish and Italian yields came down; agreement includes a new Greek EFSF/EU programme of €109bn; the private sector will contribute €50bn until mid-2014, and €106bn until 2019; participation scheme will attract a temporary SD rating; package includes funds for bank recapitalisation and collateral enhancements to allow Greek banks to borrow from ECB; EFSF loans' maturities will be lengthened to 15-30 years, and interest rates cut to 3.5%; this also applies to Ireland and Portugal; EFSF can act pre-emptively, and will get flexible credit lines, right to buy bonds in secondary markets, and to recapitalise banks; details of PSI to be worked out with IIF; European Council also agreed on what it called a Marshall Plan for Greece, with more EU investments flowing into the region; Nicolas Sarkozy calls it the beginning of a European Monetary Fund; FT calls it a political victory for Angela Merkel; Hans Werner Sinn says agreement amounts to economic blackmail against Germany; other German economists are more balanced in their assessment; FT Deutschland gave a cautious endorsement of the agreement; Les Echos celebrates Nicolas Sarkozy as the eurozone's crisis manager; Dominique Seux writes the EU will need many more such agreements to overcome the crisis; Jean Quatremer called last night's summit a beautiful success that proved the eurosceptics wrong; the Irish Independent welcomes the €800m a year reduction in Irish interest payments; the FT's Lex column says the market reaction is too extreme; Nouriel Roubini says the reduction in net present value is not sufficient; Paul Krugman focuses on the EU's wish for everybody to save at the same time, to be competitive against each other; Bild, meanwhile, is jubilant about the fact that Greece is now bankrupt.