Nicolas Sarkozy and Angela Merkel dreamed of a new treaty creating economic unity, but as they failed to secure all 27 signatures, it will only be an intergovernmental agreement that will strengthen fiscal discipline in the EU.
In the end the 17 eurozone states were joined by nine other EU members, with only the United Kingdom remaining outside.
The British Prime Minister has pleased the Eurosceptics in his party, at the cost of tension with those who wanted closer unity. He had asked for the City to be exempted from European financial sector surveillance but this was deemed inadmissible by his continental counterparts.
The new agreement will see the deficit ceiling included in the constitutions of member states. The European Court of Justice will be responsible for ensuring the legislation adopted at national level is consistent with the new agreement.
Automatic sanctions will be taken against a state whose deficit exceeds three percent. A European Stability Mechanism will replace the European fund at an earlier date: July 2012, and it will contain 500 billion euros.
Moreover, the states of the euro area and others will lend the IMF in the region of of 200 billion euros in bilateral loans.
This safety net is supposed to fly to the rescue of troubled states. A victory for Sarkozy and Merkel as the substance of the new treaty is largely based on their proposals. On balance it was also a political gain, as although the crisis mainly concerns the countries of the euro zone, in the end all but one EU country joined them.
The deal is not perfect however, as the European stability mechanism is only 500 billion euros and some wanted to see it at three times this amount. The European Commission will only be able to observe national budgets with no powers to enforce legislation, and the door remains closed, even in the distant future, on the issue of euro bonds.