European leaders in Brussels agreed in the early hours of Friday morning to embark on a limited revision of the EU's rulebook to underpin the multibillion-pound bailout of Greece.

In what was described by one official as ""classic horse trading"", the German chancellor, Angela Merkel, secured a partial victory after the 27 EU leaders endorsed a ""limited treaty change"". But Merkel failed in her bid to withdraw voting rights from member states that fall foul of eurozone rules after an outburst from smaller countries.
In lengthy talks, which finally broke for the night at 1am, David Cameron abandoned Britain's campaign for a freeze in the EU's £107bn budget for next year.
But Downing Street claimed a victory after the prime minister persuaded EU leaders that future EU budget increases should be in line with the austere fiscal approach being adopted by national governments.
The officials in Brussels dismissed the significance of the concession. They said that the EU budget has increased by 3.2% over the past decade while the national budgets of all member states bar Romania and Bulgaria have increased by 4.9% over the same period.
The concession on the budget was granted to Cameron during the EU horse trading in lengthy talks at the headquarters of the European Council in Brussels. ""It was brutal,"" one observer said.
Merkel managed to secure what is described in the draft conclusions as a ""limited treaty change"" that will ensure a legally watertight underpinning of the €110bn (£95.7bn) bailout for Greece and the wider €750bn bailout for others. The chancellor told the summit that the bailouts could be challenged in the German constitutional court unless they are codified in EU law. But, in an ill-tempered summit:
-- Nicolas Sarkozy, the French president, upset many member states when he swung in behind Merkel and demanded support for treaty change on the grounds that the larger member states had saved struggling countries. At one point Sarkozy interrupted Jean Claude Trichet, the French president of the European central bank, and told him he could not tell politicians what to do.
-- George Papandreou, the Greek prime minister, issued an impassioned plea against Merkel's plans to strip errant member states of their voting rights. In a row on the voting issue, that lasted two hours, the Irish prime minister, Brian Cowen, said he would never be able to win a referendum on a new treaty if it involved denying Ireland its voting rights.
-- Merkel finally accepted that voting rights would not be withdrawn from member states that fell foul of the target in the stability and growth pact. These are to keep annual deficits no higher than 3% of GDP and to keep debt at no higher than 60% of GDP.
The German chancellor won a small concession in this area. The draft conclusions say that Herman van Rompuy, the president of the European council, will examine voting rights in the future.
EU leaders are expected to reach agreement at their next summit in December to allow the changes to come into place by 2013.
EU leaders are hoping that the modest treaty change will mean that Ireland will not need to hold a referendum. Ireland usually has to hold a referendum when a new treaty is agreed because they involve revising its 1937 constitution.
(Source: The Guardian)
(Photo: Angela Merkel and David Cameron at the summit in Brussels Friday. (Photo: Francois Lenoir/Reuters)