I say “breakthrough,” because I’m taking it with an extremely large grain of salt, but it does appear as if at least some sort of definitive action — good or bad — is going down in the EU. Overnight, European leaders reached a deal to ease the recapitalization of their ailing banks, a move that’s ostensibly going to help bring them back from the brink:

Under the deal, European leaders agreed to create a single supervisory body to oversee the eurozone’s banks which could use the single currency area’s rescue funds, the European Financial Stability Facility or European Stability Mechanism, to aid banks directly without adding to governments’ debt.

European Union leaders are hoping for implementation of the agreement by July 9, an EU statement said.

The deal means Spain’s formal request this week for eurozone bailout funds to recapitalize its troubled banking sector will not add to its sovereign debt. Madrid had feared the increased debt load would send its borrowing costs even higher.Ireland, which hopes to rework the terms of its bailout deal, and Italy, which like Spain is battling with spiraling government borrowing costs, could also benefit from the new deal.

I’m not at all convinced that reshuffling your debt and securities around and essentially just promising more bailouts of one form or another is supposed to solve any real problems. The undeniable fact remains that you’ve all spent yourselves into oblivion, and nobody seems to have any actual money on hand, and everybody just ganged up on poor Germany — the last semi-sane country left over there (for a much more specialized opinion than mine, ZeroHedge is also wildly skeptical, to say the least). But hey, a lot of the mainstream headlines are saying this is progress (so it must be true, right?), and the markets seem to be rallying:

Stocks opened sharply higher, joining a global rally, as a euro-zone agreement to aid struggling banks eased fears about a further lack of progress in addressing the region’s debt crisis.

The Dow Jones Industrial Average jumped 190 points, or 1.5%, to 12793 in the minutes after the opening bell. The gains came on the final day of a solidly down quarter for U.S. stocks, largely due to a steep decline in May.

The Standard & Poor’s 500 advanced 21 points, or 1.6% to 1350, while the Nasdaq Composite rose 52 points, or 1.8%, to 2901.

It goes without saying that the stock market is a fickle thing, but for now at least, any signs of life from Europe — which habitually demonstrates just about the level of willpower it takes to roll over and die — is helpful in registering a blip on the global economy’s lifeline. The global financial crisis is a huge impediment to Obama’s reelection gambit, and Obama needs the global economy to at least look like it’s doing something and reverse the trend of merely terrible economic news.

So, while it was largely agreed upon that President Obama had a terrible few previous weeks, one of Team Obama’s biggest hurdles — ObamaCare’s constitutionality — is finally resolved with the Supreme Court’s left-field ruling on the individual mandate. Adding a strengthening European heartbeat (as misplaced and short-term as that optimism may be) to the week’s political developments is just gravy. Blergh.