Minister for Finance Michael Noonan has said the EU summit agreement was a quantum leap towards a solution to the debt crisis that threatens the survival of the single currency.

Eurozone leaders last night struck a deal with private banks and insurers for them to accept a 50% loss on their Greek government bonds under a plan to lower Greece's debt burden and contain the eurozone crisis.

Speaking on RTÉ's News At One, Mr Noonan said it was a comprehensive deal that dealt with all the issues, including bank recapitalisation, preventing contagion, a deal for Greece and governance.

He said the euro now looks secure, Europe will go back to growth and the threat of a recession emanating from Europe has been removed.

Mr Noonan said Ireland's main strategy was to grow its way out of trouble.

The minister said Ireland was not looking for a write-down similar to Greece, because Ireland was in a programme, getting loans at 3%, and expected to be back in the markets in the second half of 2013.

On the other hand, he said Greece was looking at least another ten years of austerity programmes and possibly 16 years.

Mr Noonan said Ireland has been successful in a serial renegotiation of aspects of its programmes, and while it aimed to reduce the overall burden of the debt, the Government will not touch its sovereign debt.

French President Nicolas Sarkozy said this evening it had been an error to admit Greece to the eurozone in 2001, but said he was confident the country could emerge from its debt crisis.

Asked if he had confidence in Greece, Mr Sarkozy said, "Yes... we have no other choice," but asked about the country's entry into the eurozone, he added: "It was an error because Greece entered with false (economic) figures... it was not ready."

The agreement was reached after more than eight hours of negotiations in Brussels involving bankers, heads of state, central bankers and the International Monetary Fund.

It aims to draw a line under spiralling debt problems that have threatened to unravel the European single currency project.

Under the deal, the private sector agreed to voluntarily accept a nominal 50% cut in its bond investments to reduce Greece's debt burden by €100bn. This will cut its debts to 120% of GDP by 2020, from 160% now.

At the same time, the eurozone will offer "credit enhancements," or sweeteners, to the private sector totalling €30bn.

The aim is to complete negotiations on the package by the end of the year, so Greece has a full, second financial aid programme in place before 2012.

The value of that package, EU sources said, would be €130bn, which is up from €109bn when a deal was last struck in July, an agreement that subsequently unravelled.

"The summit allowed us to adopt the components of a global response, of an ambitious response, of a credible response to the crisis that is sweeping across the eurozone," Mr Sarkozy told reporters afterwards.

As well as the deal on deeper private sector participation in Greece - which emerged after Mr Sarkozy and German Chancellor Angela Merkel engaged in the negotiations with bankers - eurozone leaders also agreed to scale up the European Financial Stability Facility, the €440bn bailout fund set up last year.

The fund has already been used to provide help to Ireland, Portugal and Greece, leaving around €290bn available.

Around €250bn of that will be leveraged four or five times, producing a headline figure of around €1 trillion, which will be deployed in a variety of ways.

Leaders hope that will be enough to stave off any worsening of the debt problems in Italy and Spain, the region's third and fourth largest economies respectively.

"The leverage could be up to one trillion (euros) under certain assumptions about market conditions and investors' responsiveness in view of economic policies," said Herman Van Rompuy, the president of the European Council.

"There is nothing secret in all this, it is not easy to explain but we are going to more with our available money, it is not that spectacular. Banks have been doing this for centuries, it has been their core business, with certain limits."

European markets saw strong gains today after news of the deal emerged.

Earlier Asian markets closed higher, while the euro rose above $1.40 for the first time in seven weeks.

Meanwhile, Ireland should be in a position to resume borrowing on international debt markets in late 2012 or early 2013, the IMF's chief economist has said.

"I am fairly confident that with the path you are (on) in late 2012, first semester 2013, you should be able to go back there with relatively small spreads," Olivier Blanchard told reporters after delivering a speech to students at Dublin's Trinity College.

He said Ireland has turned a corner, adding that "unemployment is still much too high, production is much too low but the signs are pointing in the right direction."