Investors overseas are optimistic Thursday morning after European leaders agree to a plan to reduce Greece’s massive debt.

Shares on Greece’s stock market rose sharply Thursday following the debt deal, as politicians and analysts reacted cautiously while scrambling to gather details of the landmark agreement.

In midday trading, shares on the Athens Stock Exchange were up 3.52 per cent at 801.06, with banking stocks up more than 10 per cent — after suffering heavy losses earlier this week.

The deal requires banks to take on 50 per cent losses on Greeks bonds. Eurozone countries and the International Monetary Fund will also provide an additional C100 billion ($140-billion) in rescue loans as a second bailout package for Greece.

“We have avoided a mortal national danger,” Socialist Prime Minister George Papandreou told a news conference in Brussels after the night-long negotiations were concluded.

“Just the fact that we got here (Thursday) is an achievement … Today we have the ability to close our accounts with the past,” he said. “A burden from the past has gone, so that we can start a new era of development, on our own steam.”

The government this week abandoned talk of seeking opposition support for a three-fifths majority in the 300-seat parliament to approve the new debt deal, after rival parties indicated they would vote against it.

Opposition parties appeared critical of the deal Thursday.

“I haven’t seen the details, but from what I’ve seen so far, this will undoubtedly impose an additional burden (on taxpayers),” Costas Markopoulos, parliamentary spokesman for the main opposition conservatives, told private Skai television.

He urged caution, as past European debt agreements had unraveled or failed to improve the sustainability of Greece’s C350 billion national debt.

“We’ve already been saved by the prime minister four times … Does anyone believe that as we stand on the edge of the cliff, after they have shaved off our debt, that they will offer us anything (positive)?”

Prominent left-wing deputy Dimitris Papadimoulis said the agreement would doom Greeks to a deeper recession.

“The deal puts Greece in a eurozone quarantine,” he said.

“We are now locked in a system of continuous austerity, haphazard privatization, and continuous supervision by our creditors … Those who monitor us do not have our interests in mind. Their priority is that we pay back our loans.”