European Commission President José Manuel Barroso has said Britain's demand for special treatment for financial services at last week's EU summit would have harmed the bloc's single market.
In a speech to the European Parliament, Mr Barroso said: "The United Kingdom, in exchange for giving its agreement, asked for a specific protocol on financial services which, as presented, was a risk to the integrity of the internal market. This made compromise impossible".
The intergovernmental deal that is set to be agreed by up to 26 EU countries will not be enough on its own, however, and member states must also restore growth and boost employment, he added.
European Council President Herman Van Rompuy said the intergovernmental treaty on stricter fiscal rules will be finalised by March.
A review of the adequacy of the €500 billion ceiling on the eurozone's combined bailout funds will also be completed by March, Mr Van Rompuy said.
The so-called fiscal compact is designed to allow closer surveillance of spending by countries, in an effort to prevent a repeat of the eurozone's debt crisis.
Taoiseach Enda Kenny has spoken to the British Prime Minister David Cameron tonight on the outcome of the EU summit.
A spokesman said their discussions were positive with both leaders reaffirming the importance of continued political and economic ties between the two countries .
Kenny 'raised Irish economic situation at summit'
Taoiseach Enda Kenny has told the Dáil that he did raise the issue of Ireland's particular economic situation at the EU Council Summit at the weekend.
In response to a question from Sinn Féin's Gerry Adams, he said he made the point to the summit that considering Ireland took a loan of €63bn for bank recapitalisation before the bailout, our repayment criteria should be reconsidered to alleviate hardship on our people.
Mr Adams claimed in the Dáil that the Taoiseach told them at a private meeting with opposition leaders this morning that he did not raise the issue of Ireland's debt at the EU Council summit.
The Taoiseach strongly denied this, and said he did raise the issue.
The Taoiseach added that it would be in everyone's interests that there would be more fiscal discipline in how countries draw up their budgets.
He said there is alot of technical and legal work to be carried out on the agreement reached at the EU Summit and once a detailed analysis and consideration is made, it will be assessed if it conforms to the Irish constitution and if we need referendum, it will be held.
He said we cannot have growth and development of jobs, until we fix the engine of our economy which is in poor state at moment. He said this agreement is a step towards this.
Opposition leaders have been briefed on decisions taken during last week’s summit.
Fianna Fáil leader Micheál Martin reiterated his position that a referendum was needed on the agreement and said he was surprised there was not already clarity on the issue.
He said after the meeting with Mr Kenny that it was clear the summit had "gone down one track - more fiscal rules which will not address the core issues”.
Mr Martin said it remained unclear if an economic assessment on the ten year impact this deal could have on Ireland has been carried out by the Department of Finance.
Sinn Féin leader Gerry Adams said he believed Ireland had signed up for "austerity in perpetuity" saying this was bad for "Irish citizens and citizens across the EU".
He said nothing the Taoiseach told him this morning allayed his concerns about the deal.
Representing the Technical Group at the briefing, Independent TD Catherine Murphy said: "It appeared the focus at the summit had been on the euro and its sustainability, we have already paid a very heavy price for that.
She said there seemed "little mood" at European level to focus on individual country's issues.
