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(CNBC) By Catherine Boyle - The European Union deal announced early Friday morning is yet another small step along the road to solving the euro zone debt crisis rather than a conclusive solution, analysts and economists told CNBC Friday.
EU leaders have secured new rules on tougher budget discipline but failed to agree on a treaty change to enshrine the rules, making it more likely that the 17 euro zone states will reach a deal separately.
British Prime Minister David Cameron was the most high-profile dissenter from the proposals to grant the EU greater powers.
"This is another stage down the road towards fiscal union and also marks progress in terms of the EFSF and IMF. Obviously, this is not the end station," Jens Larsen, Chief European Economist, RBC, told CNBC.
Markets will probably need to see a precautionary facility from the International Monetary Fund for Italy, Larsen added.
Two of the key elements to Friday's deal were automatic sanctions against countries in the euro zone which break its deficit rules – as Greece did - unless three-quarters of states vote against the move, and a new fiscal rule on balanced budgets becoming part of national constitutions.
"The key thing here is the enforcement mechanism," said Larsen. "In the end, the test will be if the new rules are enforced, if governments are really willing to impose fines on each other for breaking these rules."
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