Franco-German proposals accepted

Although very few details have been unveiled, Sarkozy said at the conference that "We (the 23 countries) accepted the entire contents of the Franco-German letter."

In a joint letter to Van Rompuy on Wednesday, German and French leaders called on "eurozone countries to have a rule in their constitutions (or equivalent laws) that budgets have to be balanced in structural terms."

They also proposed that if a eurozone country allowed its budget deficit to rise above 3 percent of its GDP, it should face automatic sanctions, which could be stopped only if three quarters of euro zone ministers are against them.

Merkel and Sarkozy also suggested that a country with too high deficit should agree with the Commission and eurozone finance ministers on a series of fiscal and structural reforms to get back in line.

"If the country with excessive deficit does not mend its ways, it should face increasingly unpleasant consequences," said the letter.

The Franco-German letter also proposed that the European Court of Justice, the highest EU court, should determine if the balanced budget rule is adopted into national laws.

Short-term boost

On the short-term measures to solve the debt crisis, EU leaders have agreed to channel up to 200 billion euros (about 267 billion U.S. dollars) to the International Monetary Fund, and rapidly deploy the leveraging of the European Financial Stability Facility (EFSF), the eurozone's temporary rescue fund.

The details concerning expanding the EFSF capacity are to be further discussed at the second session of the summit Friday afternoon, Van Rompuy said.

Meanwhile, the entry into force of the European Stability Mechanism (ESM), the eurozone's permanent rescue fund, will be accelerated to further help address the crisis, as EU leaders have agreed on its launch in July 2012, about one year earlier than originally planned.

However, there was no agreement on giving the ESM a banking license, which had been mentioned in a draft document for discussion, Van Rompuy told reporters.