EU leaders are to bring in new laws for a permanent rescue fund for indebted Eurozone members.

The decision, at a summit in Brussels, is designed to avert another Greek style budget crisis.

Taoiseach Brian Cowen said that if there is no transfer of powers to the European Union as a result of changing the EU treaties, then a referendum may not be necessary.

Mr Cowen was speaking after EU leaders agreed to set up the permanent rescue fund for countries facing a sovereign default.

German Chancellor Angela Merkel had insisted that changes were needed to prevent a repeat of the Greek debt crisis.

Speaking on RTÉ's Morning Ireland, EU Commissioner for Climate Change Connie Hedegaard said that the decisions made by the member states last night would help the stability of the euro.

European Council President Herman Van Rompuy will talk to all 27 national capitals to work out how each country might have to ratify any such change.

The plan is to have a report ready by March, then a decision taken by heads of government next June, followed by a ratification process concluding in 2013.

That is when the temporary EU rescue fund is due to expire.

Governments want the process to be a speedy one, using whatever legal options are available to avoid any wholesale reopening of the Lisbon Treaty.

But the question of voting rights being suspended if a country persistently breaches deficit rules would almost certainly trigger an Irish referendum.

That issue, which is Germany's second key demand, has been parked for the moment. However, it has not been eliminated completely.