BRUSSELS (Reuters) - Europe divided in a historic rift on Friday over building a closer fiscal union to preserve the euro, with a large majority of countries led by Germany and France agreeing to forge ahead with a separate treaty, leaving Britain isolated.
Following are highlights of comments by EU leaders and other top officials after the end of their two-day meeting.
"There was an interesting dynamic involving countries traditionally restrictive with regards to firewalls, which showed a certain disposition to movement towards the others.
"This showed up only partially in the figures but I noted that this readiness to consider that firewalls are a very important thing is increasing. I think this is not unrelated to what countries in difficulty are doing."
"Don't be deceived. The fact that euro bonds do not figure as such in the statement by the euro area heads of government does not mean that work is not going on.
"Some member states with a known traditional hostility to the concept of common issuance would have preferred to declare that the idea itself was ruled out.
"But the idea prevailed -- and I, along with some others, fought a lot in this direction -- the idea prevailed that in an integrated area which declares it wants to move towards a fiscal union, it would be inconsistent to declare straight away that it permanently rejects an instrument which allows it to gain certain advantages of a fiscal union."
"There is one factor I would like to underline, even if there is no figure attached to it, namely the removal of an element born on the beach at Deauville, regarding private sector involvement, which caused some not inconsiderable problems.
"This has been ex post confined to the Greek crisis and so, although there is no increase in the amount of spending by the states, this will allow actions undertaken by states to create effects that cause less worry than private sector involvement."
"This is a breakthrough to a union of stability. The fiscal union will be developed step by step."
"We will use the crisis as a chance for a new beginning."
"The message is: if we have a common currency we have to accept that common institutions also have responsibility when you don't stick to the agreements...
"When someone doesn't stick to the agreements, then you have to clamp down on it and that is becoming reality now, step-by-step.
"In the beginning of March, the treaties will be presented and can be ratified immediately. It will change the character of the ESM (permanent bailout fund) and with that we have a nucleus of a stability union..."
"We regret that Britain could not go this way."
"Every effort for Europe and for the euro is worth it. We made clear that Europe has recognized the seriousness of the situation... and that we are determined to learn the lessons from the past.
"We are seeing the causes of the crisis clearly. Step-by-step we are creating a new basis of trust, for the euro, for our common currency.
"There was really only one country that was more distanced. That was Great Britain. But I want to stress that it's clear from talks with David Cameron, Britain too is dependent on a stable euro, as it influences the economic situation in all of Europe. We're all in one boat."
"We achieved an important step towards a long-term stable euro. You can say it's the breakthrough to the union of stability. The stability union, the fiscal union will be developed step-by-step in the next years, but the breakthrough has been achieved."
ON EURO ZONE'S ESM PERMANENT BAILOUT FUND AND EU INSTITUTIONS:
"An aid fund becomes a treaty that makes clear the union of stability. In this treaty we will give the institutions a very strong role, both the (European) Commission and the European Court of Justice.
"In creating this treaty, we will also invite observers from the (European) Parliament to make clear that we want to involve everyone and want a high degree of community.
"The message of this summit is clear, we are using the crisis as a new beginning."
"It was a very constructive discussion with the European Central Bank that has very clear ideas also about debt brakes, because it sees that very important markers have to be laid down that were not there before. Naturally, we didn't speak about the role and behavior of the ECB."
"We welcomed the ECB's proposals, made by its President Mario Draghi, that in future the ECB will support the EFSF with its expertise. That will mean the EFSF (temporary bailout fund) can work better. Secondly, we want to move forward the ESM (permanent bailout fund) to 2012 and we will have a consolidated upper limited of the EFSF and ESM of 500 billion euros."
"On top of that, there will be a top up of resources at the IMF... If euro zone members or other EU members place bilateral credit lines with the IMF, it will be possible to lobby for support outside of Europe and increase the firepower of the IMF with regards to European help. That is important and good."
"We increased the bilateral loans to the IMF in 2009 at the London meeting of the G20 and it will happen again in a similar way here."
"Private sector involvement (PSI) will be designed according to IMF principles in the ESM, collective action clauses will be brought into the ESM and we will make possible urgent decisions on granting financial aid with high qualified majority, with 85 percent... when the financial stability of the euro zone is threatened."
BRITISH PRIME MINISTER DAVID CAMERON ON BRITISH MEMBERSHIP OF EUROPEAN UNION:
"The membership is in our interests and I've always said that if that's the case, I will support our membership."
"Britain's influence in the European Union will be maintained."
"...The decisions taken today by European leaders at their summit meeting are an important contribution to helping address the crisis facing the euro zone and strengthening the global economic recovery.
"I welcome in particular the progress made in three critical areas:
"First, the agreement reached to enhance fiscal discipline and strengthen economic policy coordination in the euro zone.
"Second, the decision to accelerate the entry into force of the European Stability Mechanism (ESM) treaty, which will help bolster the firewall against financial contagion.
"Third, the commitment by EU member states to provide additional resources to the IMF of up to 200 billion euros (about $270 billion). These resources will enhance the IMF's capacity to fulfill its systemic responsibilities in support of its global membership -- which is especially important given the ongoing economic slowdown and financial market tensions.
"I appreciate this demonstration of leadership from Europe, and I am hopeful that others will also do their part."
EUROPEAN COUNCIL PRESIDENT HERMAN VAN ROMPUY ON EURO ZONE TREATY:
"It is unfortunate that we missed that chance to have a full-fledged treaty change."
"This treaty will be open to non-euro zone countries. Except for one, all are considering participation."
"We took important decisions to safeguard the euro zone, both short term and medium term.
"The 17 member states of the euro zone and already many others are committed to a new fiscal compact, a new European fiscal rule to be transposed in national legislation.
"It is about more fiscal discipline, more automatic sanctions, stricter surveillance. An intergovernmental treaty will make this agreement binding in combination with secondary legislation and firm political commitments this will give the fiscal compact its full force."
"This formula has some handicaps, but we will try to overcome them, and I think we will need a large interpretation of the role of institutions and others, as we did it in the past.
"So I think that there is also a very clear political message to the outside world, that even if we have not all the legal instruments of enforcement, that via an intergovernmental treaty, we will be as binding... as possible."
"Of course the European Parliament will be associated in this process. The objective remains to incorporate these provisions into the EU treaties as soon as possible."
"As regards the calendar, I see two steps. Rather rapidly, following consultations with national parliaments we should know the number of participating states. I'm optimistic, because I know that it is going to be very close to 27. In fact 26 leaders are in favor of joining these efforts, but we will see. They recognize the euro is a common good."
"Then early March, at the latest, this fiscal compact treaty will be signed, could be earlier also. The ESM (permanent bailout fund) treaty for its part will be finalized in the coming days. It will integrate yesterday's important decision that we change the approach to the private sector involvement, bringing it fully in line with the IMF principles and practices. The aim is for the ESM treaty to be ratified by mid-2012."
EUROPEAN COMMISSION PRESIDENT JOSE MANUEL BARROSO ON DEAL AMONG EURO ZONE RATHER THAN EU 27:
"Very openly, we would have preferred an agreement to take a community treaty that could bind all the 27 member states, even if what we are looking for was the reinforcement of the euro area governance and some conditions specifically for the euro area.
"So this, we should not forget, what is our aim. The aim is to reinforce discipline, reinforce convergence and to reinforce governance of the euro area, not necessarily for all the 27, but for the euro area.
"And as we know there are at least two member states that have an opt-out of the euro area."
"So from an institutional point of view it would be much more simple if we could have all the member states agreeing. Now it's also true that going through this way it would be most likely quicker, and this is important as well, because this can be achieved in a very, let's say, reduced timing..."
"Work will now begin to rapidly flesh out the details of this new treaty. The Commission will be acting to ensure swift preparation of the treaty that is fully compatible with European Union law, and which also preserves the role of the European institutions."
"It is in Hungary's interest that the crisis in the euro zone was solved as soon as possible. It makes our country a target of speculative attacks. Sometimes we have a feeling the whole fleet, not just one ship, is under attack."
"The Hungarian position is very clear: in issues that touch upon national sovereignty the government cannot act without discussion... in different sessions of parliament."
"Hungary has no reason to rush ahead, no reason to join something that's not well thought through. That would be adventurism."
GREEK PRIME MINISTER LUCAS PAPADEMOS ON MOVES TOWARDS A NEW EURO ZONE TREATY:
"The decisions taken are significant steps towards tackling the crisis, as well as avoiding seeing these kind of phenomena again in the future."
"The measures taken by the ECB are particularly significant and will contribute to limit the tension in the bond markets. The positive impact from the ECB's measures must be taken into account as well."
"The effort (of the Greek government) is to maximize the participation of the private sector (in the PSI), that is the goal. There is no particular reason to worry. Talks with private bondholders are ongoing."
Reporting By Ben Deighton