World financial markets soared Thursday after the European Union approved a plan to cut Greece’s debt in half and significantly increase a bailout fund designed to contain the eurozone debt crisis.

Major stock market indexes in Germany and France gained about five percent after the announcement from Brussels early Thursday. The common European currency, the euro, had modest gains. Stock markets in Asia were up between two and three percent.

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

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.

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 chief 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.