EU leaders agree on tougher budget rules for the eurozone

EU leaders agree on tougher budget rules for the eurozoneLeaders of the member states of the European Union have agreed on much tougher rules government their budgets in order to control the economic crisis in the region.

Following hours is discussions among the leaders; they agreed to work towards a new "fiscal compact". The member states will now work under tougher deficit and debt regime in the eurozone amid growing threats from the debt crisis.

The eurozone is facing a debt crisis that has sent Greece in to a crisis and which now threatens larger economies of Italy and Spain. The European leaders are aiming to control the crisis and help affected states to stop the crisis from spreading across eh region.

European Central Bank President Mario Draghi said that the new agreement is a step forward in "fiscal compact". He has said that fiscal consolidation is necessary for the 17-nation euro zone to emerge from the debt crisis.

"It's going to be the basis for a good fiscal compact and more discipline in economic policy in the euro area members. We came to conclusions that will have to be fleshed out more in the coming days." Draghi said.

Meanwhile, German Chancellor Angela Merkel and French President Nicolas Sarkozy were asking leaders to agree to change the Lisbon treaty for more strict rules but the UK did not back the move. The leaders will now look at create a treaty among the euro zone member states and new members.