Here's what Angela Merkel had to say on her way into the meeting:
We made important decisions for the euro yesterday. It was about starting the fiscal and stability union. We have made good progress, especially with regards to the debt brake for all states that will be part of this new treaty and more automatic sanctions.
We are very happy that not just the euro states, but also a number of other states, will become part of this strong fiscal discipline: the Baltic countries, Poland very important, Denmark, Bulgaria, Romania and two more countries analysing this. I'm very happy with the result because we had to avoid a lousy compromise for the euro, and we have succeeded.
On Britain opting out of the deal, she added:
The British were never part of the euro, they had an opt out from the beginning, so we are familiar with the situation. We have started Schengen with a number of states and we have said in the text adopted yesterday that if the situation arises in which we can take it up in the treaties with all, as we have done with Schengen, then we will do it as soon as possible.
...David Cameron was at the negotiating table with us, we made this decision. We couldn't make a lousy compromise for the euro but we had to set up hard rules. ... that won't deter Europe from making joint decisions in many other questions for example when welcoming Croatia as our new member.
To recap, Britain has vetoed an EU treaty change on measures to resolve the eurozone debt crisis.
However the 17 eurozone nations plus six countries who hope to join the single currency have agreed to sign up to a new treaty that will introduce stronger controls over individual countries' finances.
Here is what they are signing up to:
- Eurozone states' budgets should be balanced or in surplus.
- Such a rule will also be introduced in eurozone member states' own national legal systems; they must report national debt issuance plans in advance.
- As soon as a euro member state is in breach of the 3pc deficit ceiling, there will be automatic consequences, including possible sanctions, unless a qualified majority of euro states is opposed.
Looking at the nitty-gritty of what was agreed last night in terms of financial measures to bolster the eurozone's ability to rescue indebted nations, here are the key points:
- EU countries agreed to provide €200bn in bilateral loans to the IMF to help tackle the debt, with €150bn of the total coming from the eurozone countries.
- The European Stability Mechanism (ESM), the permanent resuce mechanism due to come into force in July 2012, will be capped at €500bn (£423bn).
- The ESM will not get a banking license, as had been proposed by Herman Van Rompuy of the European Council, because Germany opposed it.