The EU leaders’ summit in Brussels has reached agreement on the new intergovernmental treaty to toughen budgetary discipline.
25 of the 27 member states have signed up to the agreement. The Czech Republic and the UK have remained outside the deal. The Taoiseach Enda Kenny earlier said the Irish Government had no fear about holding a referendum on the document.
The pact, pushed by Germany, will require governments to introduce laws on balanced budgets and impose near automatic sanctions on countries that violate deficit rules.
An agreement emerged after France and Poland overcame a dispute over Polish demands for non-euro nations to have a seat at euro zone summits.
The treaty must be formally signed in early March and will come into force once 12 nations have ratified it.
The leaders also agreed that a €500 billion European Stability Mechanism will enter into force in July, a year earlier than planned, to back heavily indebted states. But Europe is already under pressure from the US, China, the International Monetary Fund and some of its own members to increase the size of the financial firewall.
After the summit, EU Council President Herman Van Rompuy said EU leaders were calling a deal between Greece and its lenders on cutting its debt by the end of the week.
Earlier, the EU leaders promised to stimulate growth and create jobs, acknowledging that the focus on austerity has had painful side effects.
They have pledged to offer more training for young people entering the work force, deploy unused development funds to create jobs, reduce barriers to doing business across the EU's 27 countries, and ensure that small businesses have access to credit. But there was no offer of any new financial stimulus.
German proposal for Greece rejected
Chancellor Angela Merkel earlier sought to placate critics of a German proposal to put Greece under the supervision of an EU budget tsar, saying Europe must help Athens enact economic reforms.
The idea that Greece might cede budget control to the EU was contained in a German submission to its euro zone partners first revealed on Friday night by the Financial Times and confirmed by European sources.
Under the radical plan, denounced by Greek officials, a commissioner appointed by the 16 other euro zone finance ministers could veto budget decisions made by Athens.
Luxembourg Prime Minister Jean-Claude Juncker, chairman of euro zone finance ministers, also rejected the proposal to put Greece's budget under the supervision of a special EU commissioner.
"I am strongly against the idea of imposing a commissioner with that mission only to Greece. That's not acceptable," Juncker said on arrival at a European Union summit.
Meanwhile, Greece's Alpha Bank has frozen merger talks with Eurobank pending the conclusion of tough negotiations between the Greek government and private creditors on a huge sovereign debt write-down.
