The "fiscal compact" outlines the closer integration of the national budgets of the 17 eurozone countries. A new legal framework and greater fiscal scrutiny will be imposed to avoid a repetition of the dubious financial practices that triggered the crisis. The treaty also agrees to strengthen mechanisms that guarantee short-term stability to euro economies in hot water.

So who is in and who is out?

All 17 eurozone nations and six other EU states outside the euro area have signed up. Initially, four countries cast doubt on the deal, complaining that it sweeps away some of the away hard-fought foundations of the European Union.

Sweden's Prime Minister Fredrik Reinfeldt told CNN that he had no mandate for treaty change. But, alongside Hungary and the Czech Republic, he said his country would leave the door open.

This leaves Britain, under Prime Minister David Cameron, alone among the 27 European Union nations to point-blank refuse to sign. Cameron said the treaty failed to safeguard Britain's voice in crucial policy decisions over the European single market and financial services sector. He said he had effectively vetoed an original deal, forcing German Chancellor Angela Merkel and French President Nicolas Sarkozy to forge ahead with a treaty that will be subservient to EU regulations.

Ireland has decided to hold a referendum on the fiscal pact because under the Irish constitution the people have to vote to ratify any significant transfer of sovereignty to Europe. It is likely to take at least three months to organize the referendum. The Irish have twice rejected EU treaties, only to approve them in second referendums.

Is this the beginning of the end for the European Union as we know it?

The treaty has exposed deep divisions between European Union members -- chiefly Britain and the rest of the bloc.

This sets the stage for a series of legal challenges as Britain strives to ensure the treaty does not result in a wholesale restructuring of the EU. Read Full Article