Besides aligning their fiscal policies, the countries also agreed to speed up establishment of a permanent European bailout fund and make a contribution to the International Monetary Fund, money that would go toward protecting countries threatened by the debt crisis.
The agreement is now subject to approval by national parliaments. In at least one Eurozone nation, Ireland, it could require approval in a national referendum.
With a significant "Euroskeptic" constituency snapping at his heels in his Conservative Party, British Prime Minister David Cameron went into the summit demanding exemptions for London's giant financial-services industry from regulations such as a proposed financial transactions tax.
Other European leaders found that unacceptable.
"I did the right thing for Britain," Cameron told the BBC. "The choice was a treaty without proper safeguards or no treaty. And the right answer is no treaty."
Anti-EU allies in Parliament hailed his decision, but his domestic critics said Cameron had succeeded only in diminishing Britain's influence in Europe in exchange for short-lived political gain.
Britain will now have no place at the table when 23, and possibly 26, nations get together to discuss joint economic policy.
"This is perhaps the most serious concern about what happened, not necessarily in the next few weeks but the next few months and years," said Maurice Fraser, an expert in European politics at the London School of Economics. "There will be corners where Britain will find it difficult to fight."
Some wonder whether the EU, which agreed Friday to admit its 28th member, Croatia, in 2013, can be credible or even survive in its present form with a marginalized Britain — or whether Britain's ardent Euroskeptics might press for a complete pullout from the EU.
But Fraser said such a step is inconceivable when continental Europe represents Britain's biggest trading partner.
"You throw a rabid dog a morsel and it comes back to bite your arm off. But I don't think that will happen," he said. "The overwhelming business interest is in seeing Britain remaining a full and influential member within the European Union."
"It would be suicide for the Conservative Party," Fraser said, "to consider a withdrawal from the EU."