The 27 members of European Union have failed to agree on a change to the EU treaty that would impose tighter rules on national fiscal policy.

Officials say an agreement involving all 27 members fell through Friday at the summit in Brussels after British Prime Minister David Cameron demanded concessions that Germany and France were not willing to give.

Diplomats say a new pact may now involve the 17-nation bloc that uses the euro and any other countries that may want to join them.

Some officials have described the European summit as a moment of reckoning for the common euro currency, under siege by Europe's burgeoning debt crisis. The meeting opened Thursday night with leaders disagreeing on how to resolve the two-year debt contagion that threatens the stability of the world economy. France and Germany want to change the EU treaty to incorporate a penalty clause for countries that exceed their budgets. They also want a unified corporate tax rate and a new financial transaction tax. But Britain, which does not use the euro, had expressed concerns that the plan would undermine its sovereignty.

European Commission President Jose Manuel Barroso had called on national governments to act in the common European interest.

The economy in the 17 eurozone nations has all but stalled, with some analysts saying it has already dipped into a recession. The European Central Bank took a modest step ahead of the summit to boost lending, trimming its prime interest rate a quarter percentage point to one percent, the second cut in two months.

But stocks slid on European and U.S. exchanges after the bank's president, Mario Draghi, dampened speculation that the central bank would increase its purchase of the debt of European governments as one way to cut their borrowing costs. A European regulator said the continent's banks need to raise nearly $154 billion to cover possible losses on government securities they hold.

French President Nicolas Sarkozy had warned of dire consequences if an agreement was not reached Friday, calling for a ” spirit of compromise and speedy decision making.”

Fears that Europe's debt crisis could spark additional problems have sent jitters through the global financial markets and have prompted warnings from several top credit rating agencies.