European Union leaders have agreed on a new international agreement to create a stronger fiscal rule.

Heads of EU member nations discussed measures to resolve the debt crisis and financial turmoil in the euro zone at the first session of the EU Summit held on Thursday and Friday.

As part of the efforts, they agreed on a new fiscal compact to prevent excessive borrowing and debt, which have contributed to the current fiscal crisis.

Seventeen EU member countries and at least six non-EU members will take part in the compact to establish a foundation for fiscal integration. However, Britain rejected the treaty and some countries say they will decide on whether to participate after consulting their parliaments.

The fiscal compact will be signed no later than March of next year and member nations will face automatic punitive measures and sanctions if their fiscal deficits exceed three percent of nominal gross domestic product. The countries will be also required to limit their government debt to no more than 60 percent of GDP.