European Union leaders announced a plan Thursday to significantly reduce Greece's debt burden and bolster the eurozone bailout fund as part of a comprehensive effort to contain the eurozone debt crisis.

Following 10 hours of tense negotiations in Brussels, EU leaders said they convinced private sector investors to accept a 50 percent loss on Greek government bonds, effectively reducing Greek debt by $140 billion.

The deal would lower Greece's debt burden to 120 percent of its GDP by 2020, down from 160 percent now.

In order to sustain losses on Greek bonds, major European banks would be required to raise an additional $148 billion by June.

EU leaders also agreed to increase the firepower of the depleted eurozone bailout fund, boosting its resources to $1.4 trillion.

European markets reacted positively, with the euro surging upon announcement of the plan. Markets in London, Paris and Frankfurt all soared in early trading.

French Finance Minister Francois Baroin said the deal has effectively saved the European single currency, telling French radio that it will “stabilize the eurozone and global growth.” World Bank cheif Robert Zoellick welcomed the deal, as did officials in China and Japan.

The full package is expected to be finalized and approved by the end of the year.

European heads of state and central bankers are attempting to resolve a two-year-long debt crisis that in recent weeks has roiled international financial markets fearful of a Greek default on its obligations, and the spread of the debt contagion to bigger European economies in Italy and Spain.