Greek Finance Minister George Papandreou during a press conference Thursday: Greece will capitalize on an E.U. agreement to slash its debt by moving forward with economic reforms.

REUTERS/John Kolesidis

tocks soared on Thursday after European leaders announced a deal to keep Greece from defaulting on its debt. Big banks agreed to write down 50 percent of Greece's loans, and European Union nations promised to increase the size of their bailout fund to $1.4 trillion. Has Europe finally taken action bold enough to prevent the crisis from exploding?

Yes. The EU is finally getting serious: European leaders have "been in denial that far greater and more comprehensive measures were necessary" to prevent complete disaster, says Michael Schuman at TIME. "This agreement shows they're waking up to reality." They're repairing and recapitalizing Europe's banks, restructuring Greece's debts, and making the bailout fund big enough to "fight contagion" in other struggling countries. These are all "crucial" steps that had to be taken to tackle the crisis.
"Europe's new debt crisis agreement: the good, the bad, the ugly"

This helps Greece — but what about the rest of Europe? Don't be fooled by all the backslapping — European leaders have failed, again, say the editors of The Economist. The Greek write-down was essential — the floundering nation just can't pay all its debts — but the deal won't solve anything without "a credible firewall around heavily indebted yet solvent borrowers such as Italy," which this agreement lacks. Until that is in place, European banks will never regain the confidence they need to "get on with the business of lending." 
"Europe's rescue plan"

Don't expect this deal to solve America's problems, either: This welcome agreement could indeed douse the fear of contagion, says Dunstan Prial at Fox Business. But it does nothing to spur growth in Europe's fragile economy. And "a sluggish European economy dampens demand for U.S. exports." There are "indirect" problems for the U.S., too. Europe and China are major trading partners, as are the U.S. and China. So "if Europe's slowdown causes a drag on the Chinese economy, that hurts the U.S.," too.
"EU puts out fire, but lots of smoke remains"