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| EU-wide treaty change bid fails | |
| (40 minutes later) | |
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| The 17 members of the Eurozone have agreed to press ahead with a tax and budget pact to tackle a debt crisis. | |
| But a German and French attempt to get all 27 EU states to back changes to the EU's treaties was dropped after objections from the UK. | |
| Prime Minister David Cameron had insisted on an exemption for the UK from some financial regulations. | Prime Minister David Cameron had insisted on an exemption for the UK from some financial regulations. |
| Instead, at least 23 countries will adopt an accord with strict penalties for those who break rules on deficits. | Instead, at least 23 countries will adopt an accord with strict penalties for those who break rules on deficits. |
| "We wish them [eurozone states] well because we want everyone to sort out their problems because we all need that [economic] growth," Mr Cameron said. | "We wish them [eurozone states] well because we want everyone to sort out their problems because we all need that [economic] growth," Mr Cameron 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." | "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." |
| The new tougher rules on spending and budgets will now be backed not by an EU treaty but by a treaty between governments. It will be quicker to set up but it may prove less rigorous, says the BBC's Europe editor Gavin Hewitt in Brussels. | The new tougher rules on spending and budgets will now be backed not by an EU treaty but by a treaty between governments. It will be quicker to set up but it may prove less rigorous, says the BBC's Europe editor Gavin Hewitt in Brussels. |
| But, he says, Europe has taken a big step towards closer integration, with binding rules over tax and spending, and sanctions against countries that overspend. | But, he says, Europe has taken a big step towards closer integration, with binding rules over tax and spending, and sanctions against countries that overspend. |
| Discussions on the details of the new fiscal arrangement are due to resume shortly. | |
| There is now a two-speed Europe - after this long night, the French president accepted that. | There is now a two-speed Europe - after this long night, the French president accepted that. |
| There is, too, considerable antagonism towards Britain - it used its veto in what is seen in Brussels as Europe's hour of need. | There is, too, considerable antagonism towards Britain - it used its veto in what is seen in Brussels as Europe's hour of need. |
| What is unclear is whether European institutions can be used to implement a treaty between governments. | What is unclear is whether European institutions can be used to implement a treaty between governments. |
| If EU officials are in the room, David Cameron has already laid down a marker that he expected the UK to be involved. It is all a recipe for further tussles. | If EU officials are in the room, David Cameron has already laid down a marker that he expected the UK to be involved. It is all a recipe for further tussles. |
| The big question is what effect all this will have on the eurozone crisis. The main impact will lie in the long-term - the agreement has little to say about the debt mountains and the absence of growth in most of Europe. | The big question is what effect all this will have on the eurozone crisis. The main impact will lie in the long-term - the agreement has little to say about the debt mountains and the absence of growth in most of Europe. |
| European stocks opened slightly down on Friday on news of the announcement. | European stocks opened slightly down on Friday on news of the announcement. |
| German praise | German praise |
| Nearly 10 hours of talks could not produce an agreement involving all member states. Instead, the 17 members of the eurozone will work on a separate deal outside EU treaties. They will be joined by at least six and possibly eight other countries. | Nearly 10 hours of talks could not produce an agreement involving all member states. Instead, the 17 members of the eurozone will work on a separate deal outside EU treaties. They will be joined by at least six and possibly eight other countries. |
| The UK and Hungary will play no part in a new inter-governmental agreement, while Sweden and the Czech Republic will consult their parliaments before making a decision. | The UK and Hungary will play no part in a new inter-governmental agreement, while Sweden and the Czech Republic will consult their parliaments before making a decision. |
| Mr Sarkozy said the sticking point had been Mr Cameron's insistence on a protocol allowing London to opt-out on proposed change on financial services. | Mr Sarkozy said the sticking point had been Mr Cameron's insistence on a protocol allowing London to opt-out on proposed change on financial services. |
| "We could not accept this," he said. | "We could not accept this," he said. |
| Mr Sarkozy said the new deal should be agreed by March. | Mr Sarkozy said the new deal should be agreed by March. |
| During the talks, eurozone leaders agreed to work on tough new budgetary rules, which envisage automatic penalties. | During the talks, eurozone leaders agreed to work on tough new budgetary rules, which envisage automatic penalties. |
| The main measures agreed to as part of the new agreement, called a "fiscal compact" include: | |
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| The German Chancellor, Angela Merkel, praised the plan and said it would contribute to securing the euro. | The German Chancellor, Angela Merkel, praised the plan and said it would contribute to securing the euro. |
| Crisis jargon buster Use the dropdown for easy-to-understand explanations of key financial terms: AAA-rating The best credit rating that can be given to a borrower's debts, indicating that the risk of borrowing defaulting is minuscule. Glossary in full | Crisis jargon buster Use the dropdown for easy-to-understand explanations of key financial terms: AAA-rating The best credit rating that can be given to a borrower's debts, indicating that the risk of borrowing defaulting is minuscule. Glossary in full |
| "I believe that after long negotiations this is a very, very important result because we have learned from the past and from mistakes and because in future [there will be] binding decisions, binding rules, more influence from the commission, more community and with that higher coherence." | |
| The head of the European Central Bank (ECB), Mario Draghi, said the accord would lead to much more discipline in economic policy, calling it "a very good outcome for the euro area". | The head of the European Central Bank (ECB), Mario Draghi, said the accord would lead to much more discipline in economic policy, calling it "a very good outcome for the euro area". |
| Our correspondent says the immediate test will be whether this agreement persuades the ECB to act more aggressively in the markets and so lower the borrowing costs of troubled countries like Italy and Spain. | Our correspondent says the immediate test will be whether this agreement persuades the ECB to act more aggressively in the markets and so lower the borrowing costs of troubled countries like Italy and Spain. |
| Can the summit resolve the EU crisis? Are you in the eurozone? Please send in your reaction using the form below. | Can the summit resolve the EU crisis? Are you in the eurozone? Please send in your reaction using the form below. |