BRUSSELS, Belgium -- In one whirlwind morning, the European Union nations agreed on the foundation of a fully fledged banking union and Greece's euro partners approved billions of euros in bailout loans that will prevent the nation from going bankrupt.
The two measures approved by finance ministers from the 27-country EU ended weeks of haggling over ways to deal with the three-year financial crisis. Their decisions free up EU leaders gathering for their summit later Thursday to concentrate on solving the region's other economic and financial problems.
"Europe and the eurozone have proved that they are capable of eliminating the challenges that confront them," said French President Francois Hollande.
A meeting of the 17 eurozone finance ministers early Thursday agreed that Greece will get a total of C49.1 billion ($64 billion) between now and March, with C34.3 billion due in the coming days. Greece needs the money to stay afloat and avoid a potential default.
The approval of funds for Greece opens "the way for a return of confidence of investment, of growth and job creation," Olli Rehn, the European commissioner for monetary affairs, said.
Rehn also criticized those who predicted that Greece and eurozone would fail to find a solution.
"They have been proven wrong by Greece, which has shown the necessary determination," he said. "They have been proven wrong by the eurozone which has made good on its word to support Greece."
In return for the money that will see Greece through the winter months, the country had to commit to further austerity measures, including more spending cuts and tax increases. It also had to complete a bond buyback program, which is intended to lighten its crushing debt load. This week, Greece said it would buy back C31.9 billion ($41.5 billion) of its bonds from private investors at a third of their face value.
Greece has been battered by a financial crisis since late 2009 that has left it dependent on funds from international rescue loans for the past two and a half years. In return for the money, the austerity has contributed to a crushing recession.
Figures earlier Thursday from the country's statistics office showed unemployment at a record high of 24.8 per cent in the third quarter of 2012, compared with 17.7 per cent in the same three months a year ago.
The meeting of eurozone finance ministers came just hours after an all-night finance ministers from all 27 countries in the European Union, which includes non-euro countries such as Britain and Poland, ended. They agreed to create a single supervisor for banks, a key component of what many hope will eventually become a fully-fledged banking union -- a single rulebook for all banks and co-ordinated plans for helping lenders in trouble.
"Piece by piece, brick by brick, the banking union will be built on this first fundamental step today," said Michel Barnier, the EU Commissioner responsible for the monitoring of financial markets.
The agreement, which still has to be approved by the European Parliament, will make the European Central Bank the supervisor for banks in the eurozone and any other country in the EU that wants to opt in. Britain, for one, has said it has no intention of joining for fear of losing its ability to control what is Europe's biggest banking sector.
Only banks with assets over C30 billion ($39 billion) or those that represent 20 per cent of their national economies will be placed under the direct oversight of the ECB, which can also supervise any other bank it wants within those countries that have agreed to be come under its orbit.
It's a major evolution in the ECB's role, whose main job up to now has been to set interest rates for the eurozone. The deal gives it broad new powers, including the ability to grant and withdraw banking licenses, investigate institutions, and financially sanction banks that don't follow the rules.
One of the key outcomes of the deal will be to pave the way for Europe's bailout fund to give direct aid to ailing banks -- a measure considered vital to helping Europe dig its way out of its three-year-old debt crisis.
"We stick to what we promised," said German Finance Minister Wolfgang Schaeuble. "Painstakingly, we advance the cause of Europe."
Later Thursday, EU heads of state and government will gather in Brussels for a summit devoted to building a closer financial and political union, meant to avoid future financial crises.
