After weeks of refusing to yield, German Chancellor Angela Merkel agreed to allow eurozone bailout funds to be used to recapitalize struggling banks.
Germany ceded a victory to its southern neighbors Spain and Italy today – not in a football stadium, but in a make-or-break summit in Brussels as European leaders reached a landmark deal to stave off what many feared would be the beginning of the end of the common currency.
After days of closed-door and microphone diplomacy, German Chancellor Angela Merkel finally agreed to allow the 17-member eurozone’s bailout funds to be used to lend money directly to ailing banks, something she had ruled out only a day before.
Berlin's concession was made in exchange for more European Union oversight of banks and national budgets – a bank union, essentially. The agreement illustrates just how worried Europe – even Germany – is of a eurozone collapse.
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