EU treaty change sinks in debt summit clash

BRUSSELS: Feuding European Union leaders failed Friday to agree a new treaty to tackle the debt crisis and instead decided to work on a separate pact for the eurozone, leaving Britain out in the cold.

A clash between Europe's big three, non-euro Britain versus France and Germany, overshadowed a pledge to pump 200 billion euros ($267 billion) into IMF coffers to help the eurozone, which is struggling to boost its own rescue fund.

The leaders agreed on a "fiscal compact" to enforce tough budget discipline in the debt-laden continent but they failed to bridge differences over carving the new rules in stone through a treaty change. Some leaders hope the tighter rules will spur the European Central Bank to step up its role in the crisis.

Six weeks after irritation boiled over at the previous EU summit, French President Nicolas Sarkozy labelled "unacceptable" conditions demanded by British Prime Minister David Cameron for London to back full EU treaty change.

Asian markets dropped as investors nervously awaited the outcome of the summit, which was resuming Friday after a first 10-hour round. Tokyo closed down 1.48 percent and Hong Kong slumped 2.73 percent

Europe's main stock markets also fell at the start of trading.