European Union leaders agreed at a summit early Friday in Brussels that a change in the bloc's rulebook was necessary to underpin a new permanent rescue fund for the eurozone, in a political coup for France and Germany, dpa reported.
The two EU heavyweights shocked the bloc on October 18 when they called for changes to the EU's treaty - usually an arduous political slog - to set up a permanent eurozone bailout facility and allow for the suspension of voting rights for recalcitrant members.
After hours of heated discussions, EU President Herman Van Rompuy told journalists that leaders had agreed "on the need ... to establish a permanent crisis mechanism to safeguard the financial stability of the euro area."
At the same time, leaders asked Van Rompuy "to undertake consultations ... on a limited treaty change required to that effect."
Treaty change is one of the hottest topics in EU politics, not least because the current set of rules, the Lisbon Treaty, came into force just 11 months ago, after 10 years of wrangling. Few leaders welcomed the idea of reopening the debate.
"Many countries do not want a huge treaty reform, and therefore we are trying to narrow it down to a very limited treaty change that should be acceptable for countries without having to face referendums," Swedish Prime Minister Fredrik Reinfeldt said.
Politicians have come to view referenda on EU initiatives as an all-but-certain way of killing them, after referendum defeats in France, the Netherlands and Ireland since 2005.
However, leaders showed little appetite for the Franco-German call to change the treaties in order to suspend the voting rights of serial budget sinners, only paying lip service to the demand.
"We decided that I will examine this later," Van Rompuy said.
Discussion will be limited to cases in which countries are ruled to present "a permanent threat to the stability of the eurozone as a whole," he said.
Taking the question off the EU agenda until Van Rompuy brings it up at an unspecified future date means that the idea "has been left on the bench," said Luxembourg Premier Jean-Claude Juncker, the EU's longest-serving leader.
That leaves the main outcome of the summit the decision to look into setting up a permanent euro bailout fund. The EU currently has one valued at 750 billion euros (1 trillion dollars), but it is set to expire in 2013.
Germany pushed for treaty change in order to stave off the risk that its national constitutional court could rule any further bailout systems illegal.
The aim of the deal is "to get the permanent crisis mechanism in place in a situation where Germany says, 'If we do not do that (treaty change), we cannot secure support for a crisis mechanism beyond the one we now have,'" Reinfeldt said.
The new rescue fund should also force commercial lenders to carry some of the cost of a state bankruptcy and involve the International Monetary Fund (IMF), officials said.
Van Rompuy is now expected to look at the political aspects of treaty change, while the EU's executive, the European Commission, should concentrate on the technical aspects of the mechanism. Both are to finish their analyses by December.
In parallel, leaders approved a series of suggestions from a "task force" of the bloc's finance ministers aimed at tightening the EU's economic discipline and policing. France and Germany won agreement to water those rules down in return for the promise of treaty change.
Separately, Britain demanded a statement on the need to control the EU's spending at a time of national budget cuts.
A number of states led by Poland and Sweden, who are currently facing deep deficits because of recent reforms to their pension systems, won the right to have those reforms taken into account in any future financial assessment, Van Rompuy said.
Under EU rules, members should keep their annual budget deficits below 3 per cent of gross domestic product and their total debt to below 60 per cent of GDP, but the thresholds have been routinely flouted over the euro's 10-year existence.