The leaders have also agreed to allow them to be recapitalised directly by the currency area's rescue fund.
The news boosted market sentiments across the globe, particularly Asia where the Hong Kong's Hang Sang was up almost 2%, Taiwan Weighted up 1.43%, Singapore's Strait times up 1.43%, Japanese Nikkei up 1.11% and Korea's Kospi up 1.08%.
Other markets that were trading up in Asia included the Indonesian markets, the Chinese markets and the Malaysian markets.
The present agreement by the European leaders will help calm sentiments and ease frail nerves over prospects of the debt contagious spreading around peripherial European economies.
Indian markets turned buoyant on reports that the GAAR provisions will not apply to P-Notes, an instrument that is widely used by foreign funds to invest in Indian equities through tax havens like Mauritius. The benchmark indices were up almost 2% at 10:44 am.
European markets are now expected to open higher following the Euro Banks.