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Euro crisis: Summit abandons EU-wide treaty change Euro crisis: EU-wide treaty change bid fails
(40 minutes later)
Attempts to get all 27 EU states to back changes to the bloc's treaties to tackle the eurozone crisis have failed.Attempts to get all 27 EU states to back changes to the bloc's treaties to tackle the eurozone crisis have failed.
Speaking after long talks in Brussels, French President Nicolas Sarkozy said the 17 eurozone states and others would work on a separate pact instead. Speaking after long talks in Brussels, French leader Nicolas Sarkozy said the 17 eurozone states and other EU members would work on a separate pact instead.
France and Germany are pushing for tough new budgetary rules to be enshrined in the accord.France and Germany are pushing for tough new budgetary rules to be enshrined in the accord.
But UK Prime Minister David Cameron said an EU-wide deal "isn't in Britain's interests". But UK Prime Minister David Cameron said Britain could not accept a new treaty without certain safeguards.
"We wish them [eurozone states] well because we want everyone to sort out their problems because we all need that [economic] growth," he said.
"But at the end of the day I made my judgment that it was not in Britain's interests [to take part]. I effectively wielded the veto."
A decision to press ahead without changing EU treaties does have benefits for the eurozone bloc, because it is likely to be less time-consuming, the BBC's Andrew Walker in Brussels says.A decision to press ahead without changing EU treaties does have benefits for the eurozone bloc, because it is likely to be less time-consuming, the BBC's Andrew Walker in Brussels says.
Discussions are due to resume shortly.
Before the announcement, world shares fell after the European Central Bank ruled out any substantial aid for indebted nations.
The US Dow Jones index closed down 1.6%. French and Italian shares ended down 2.5% and 4.3% respectively. Shares on Asian markets opened lower on Friday.
'No two-speed EU''No two-speed EU'
After nearly 10 hours of talks between EU leaders, Mr Sarkozy said he would have preferred a new treaty involving all 27 member states.After nearly 10 hours of talks between EU leaders, Mr Sarkozy said he would have preferred a new treaty involving all 27 member states.
But he said Mr Cameron had proposed a protocol to be written in the deal allowing London to opt-out on proposed change on financial services.But he said Mr Cameron had proposed a protocol to be written in the deal allowing London to opt-out on proposed change on financial services.
"We could not accept this," Mr Sarkozy said."We could not accept this," Mr Sarkozy said.
Mr Sarkozy added that Hungary also decided to remain outside the proposed treaty, while the Czech Republic and Sweden wanted first to consult with their parliaments.Mr Sarkozy added that Hungary also decided to remain outside the proposed treaty, while the Czech Republic and Sweden wanted first to consult with their parliaments.
"All the others have wished to join the inter-governmental treaty," the French leader said, stressing that the new deal should be drafted by March."All the others have wished to join the inter-governmental treaty," the French leader said, stressing that the new deal should be drafted by March.
But he denied suggestions that the new treaty would lead to a two-speed EU.But he denied suggestions that the new treaty would lead to a two-speed EU.
Speaking at a news conference shortly afterwards, Mr Cameron said he had made "a tough decision, but the right one". During the talks, eurozone leaders agreed to work on tough new budgetary rules, which envisage automatic penalties.
"What's on offer isn't in Britain's interests," he said, adding that he would not put the proposed deal before British parliament as it was an accord outside EU structures.
Mr Cameron earlier repeatedly warned that he would veto any deal which could harm Britain's powerful financial services sector, including the City of London.
During the talks, eurozone leaders agreed on tough new budgetary rules, which envisage automatic penalties.
They also said a ceiling on the size of the eurozone's bailout would be capped at 500bn euros (£427bn; $666bn).They also said a ceiling on the size of the eurozone's bailout would be capped at 500bn euros (£427bn; $666bn).
Discussions on fine-tuning of these and other key issues are expected to resume shortly. Germany and France had been pushing for changes to the EU treaty, saying stricter fiscal rules should be made part of basic EU law.
As German Chancellor Angela Merkel arrived at the summit, she told journalists: "The euro has lost credibility and that needs to be restored."
She said the European Commission and the European Court of Justice would have more powers in future to enforce the rules, declaring: "We must make clear that we accept more co-ordination."