French President Sarkozy and German Chancellor Merkel shake hands after news conference at the Chancellery in Berlin
France and Germany agree deal before Brussels meeting Reuters

Reports that Eurozone leaders have reached a provisional agreement on how to tackle the debt crises in the Eurozone have pushed up global stock markets.

The leaked draft agreement reportedly includes the possibility of a Greek bond swap and a debt restructuring, while it is thought that a bank tax has not been included."Greece is in a uniquely grave situation in the euro area," it says.

The news led to the Milan stock exchange rising by 4% while the Spanish market gained 3%. US shares also opened significantly higher.

However, it was Eurozone banking shares that led the way. In the UK, Barclays rose almost 10%, while Lloyds Banking Group and Royal Bank of Scotland were up more than 7%. French banks Societe Generale and Credit Agricole gained 6%, while the German Commerzbank climbed almost 9% and Deutsche Bank rose 3.6%.

German and French banks are the biggest holders of Greek debt.

German Chancellor Angela Merkel and French President Nicolas Sarkozy agreed a common stance before a special summit that is taking place in Brussels.

A range of measures will be discussed by policymakers at the summit in Brussels, such as a new loan package to Greece and the role of private investors in any debt restructuring.

The draft agreements added: "Greece is in a uniquely grave situation in the Euro area. This is the reason why it requires an exceptional solution. The financial sector has indicated its willingness to support Greece on a voluntary basis through a menu of options (bond exchange, roll-over, and buyback) at lending conditions comparable to public support with credit enhancement."

David Mackie, Analyst at JPMorgan, said: "Policymakers have clearly decided against a eurobond for now, but this remains the policy option of last resort should all else fail to calm markets."