08.08 Spanish borrowing costs have eased following last night's news - but not by much.
The yield on benchmark 10-year debt has fallen below the 7pc danger/alarm bells/panic level to 6.918pc, while Italy's borrowing costs have also fallen to 6.029pc.
08.03 But where there is an EU carrot, there will always be a stick. Although Spain's deficit targets have been relaxed, Mr Rehn said yesterday that the country will need to tighten its belt even more:
07.58 Jean Claude Juncker, president of the Eurogroup, and Olli Rehn, EU commissioner for economic affairs, told us five things last night:
• Spain will be granted an extra year (until 2014) to reach a deficit target of 3pc of GDP.
• As announced last month, the country's ailing banks will be recapitalised via the eurozone's temporary bail-out fund (European Financial Stability Facility). Once the permanent bail-out fund (European Stability Mechanism) is set up, funding will switch to this bail-out pot, but will not be classed as "senior" debt.
This means if Spain's banks go bust, the ESM will take losses like everyone else.
• While Spain waits for the ESM to be created, its banks will be granted access to a €30bn emergency pot.
• They hope to make this all formal by July 20.
• Meanwhile, Mr Juncker said he will step down by early 2013
You can read the Eurogroup's statement in full here.
07.50 Another long night in Brussels yesterday. Following hours of talks between eurozone finance ministers - two familiar faces emerged with another sticking plaster in tow to try and ease the crisis.
07.45 Good morning and welcome back to our live coverage of the European debt crisis.
