Leaders in and out of Europe on Thursday welcomed a grand deal at an EU summit in Brussels to cope with the sovereign debt crisis of Greece.

Greek Prime Minister George Papandreou on Thursday termed the deal as "a new era, a new chapter" for his debt-ridden nation following a marathon EU summit.

"It will be a new start for us. But the work must continue," he told reporters after the summit.

Under the deal clinched with bank negotiators, Greece's debt, which currently stands at 350 billion euros ($490 billion), is expected to be reduced by 100 billion euros ($140 billion) and its debt ratio to gross domestic product will drop from 160 percent to 120 percent by 2020.

After the summit, which dragged on from Wednesday evening till Thursday morning, German Chancellor Angela Merkel said, "I think we were able to meet expectations and we have done what was needed."

French President Nicolas Sarkozy said, "We have adopted the elements of a global response, an ambitious response, a credible response to the crisis sweeping the euro zone."

British Prime Minister David Cameron echoed, "We made good progress on the bank recapitalization, that wasn't watered down, it now has been agreed."

Australian Prime Minister Julia Gillard also welcomed the deal, but warned of more global volatility until the plan was implemented.

She and Australian Treasurer Wayne Swan, in a statement, urged the European leaders to finalize their plan and take swift action to implement it, so as to restore confidence in global markets and build growth in Europe.

Meanwhile, Canadian Prime Minister Stephen Harper, who is in Perth, Australia, for attending a summit of Commonwealth countries, said on Thursday that he was "encouraged" by the deal.

"These are steps in the right direction. Progress has been made," he said.

European Council President Herman Van Rompuy told a press conference after a prolonged eurozone summit: "We have reached a sustainable solution for Greece."

The EU leader also hailed a "sufficient firewall" against contagion, thanks to an agreement to multiply by four-fold the firepower of the European Financial Stability Facility rescue fund to increase it to 1 trillion euros ($1.4 trillion).

International Monetary Fund chief Christine Lagarde also expressed her satisfaction with the agreement, which she described as a "significant progress" on euro zone's financial crisis.

In a statement released Thursday in Brussels, she said, "I welcome the steps taken today by the eurozone leaders toward establishing a comprehensive framework to address the crisis facing the region, and I am encouraged by the substantial progress made on a number of fronts."

After tough negotiations in Brussels, European leaders persuaded banks to agree to take a 50-percent "haircut" on their holdings of the Greek debt, bringing hope to end the region's sovereign debt crisis, that has plagued Europe for two years.

(Xinhua News Agency October 27, 2011)