The head of the European Council said it was time to draw lessons
European leaders have begun talks in Brussels amid pressure to rein in the EU budget and set up a mechanism to avert future debt crises.
While next year's EU budget is not formally on the agenda, the UK has been pressing other states to reject a 5.9% rise voted for by MEPs.
Such a rise would be "completely unacceptable", UK Prime Minister David Cameron said on arrival.
There is also discord over a Franco-German plan for tackling debt.
The plan includes a controversial proposal to temporarily strip repeat overspenders such as Greece of voting rights at EU ministerial meetings.
Mr Cameron argues that the EU should set an example of budget prudence at a time of austerity, as national budgets are cut back.
He wants a budget freeze, rather than a 5.9% increase, but EU leaders are more likely to agree on a rise of about 2.9%. A deal would still have to be hammered out with the European Parliament.
Thorny treaty question
The official focus of the two-day EU summit is action to prevent new crises in the eurozone.
The Deauville Deal was announced just nine days before the summit
The Franco-German suggestion for a crisis resolution mechanism would mean rewriting part of the EU's Lisbon Treaty, which was itself only adopted after eight years of tortuous negotiations.
The so-called Deauville Deal (named after the venue for recent Franco-German talks) was reached independently of other EU leaders, who are formally due to discuss a report by a European Council task force on measures to strengthen economic governance in the EU.
The measures are intended to avoid the domino-like collapse of successive European economies should there be another major debt crisis in one of the weaker members.
"There will be a hot discussion on treaty change," one unnamed senior EU diplomat told Reuters news agency.
War of words
It has been announced that French President Nicolas Sarkozy will visit London on Tuesday for a summit with Mr Cameron on defence and the economy.
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It would be very difficult if not impossible for Britain to change the EU Council's position”
Gavin Hewitt
BBC Europe Editor
Cameron's EU budget battle
German Chancellor Angela Merkel is due to have talks with the British prime minister at his country retreat of Chequers on Saturday.
The UK says a mechanism to ensure stability in the eurozone is desirable - and that the planned sanctions would not apply to the UK. But all 27 member states' budgets will come under close scrutiny in a "peer review" process.
The President of the European Council, Herman Van Rompuy, said: "Last spring we took courageous decisions, we won the battle of the euro.
"Today we show we can draw the lessons of the crisis."
The Deauville Deal envisages, on the one hand, a permanent financial rescue fund and, on the other, progressive sanctions on countries which overshoot the maximum debt level allowed under the EU's Stability and Growth Pact, which is 60% of GDP.
European Commission President Manuel Barroso said the idea of withdrawing voting rights was "unacceptable" and would never be accepted by all 27 EU governments.
Anger over Deauville was palpable on the eve of the summit, with EU Justice Commissioner Viviane Reding dismissing talk of treaty change as "irresponsible".
France's Europe Minister, Pierre Lellouche, fired back with a description of Ms Reding's language as "unacceptable".
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Germany has ensured that, by joining forces with France, the road to consensus in the group has become generally possible”
Angela Merkel
German Chancellor
Your say: Should Lisbon Treaty be changed?
In the German parliament Mrs Merkel insisted that Deauville served the interests of the whole EU.
"We need a new, robust framework," she said. "It must be legally watertight and this will happen only with a change of the treaty."
Finnish support
Finnish Prime Minister Mari Kiviniemi said on Thursday that her country would back the Franco-German initiative.
"The euro area needs a credible permanent crisis mechanism to ensure the financial stability of the euro area as a whole," she argued.
There is broad agreement among EU leaders on the need for something to be done, BBC diplomatic correspondent Jonathan Marcus reports from Brussels.
But he adds that a revision of Lisbon would spell major domestic political problems in many EU states, with referendums or embarrassing parliamentary votes.
The likely outcome is that Mr Van Rompuy will be sent away to explore how some kind of compromise might be stitched together, our correspondent says.
"A personal mission would be the best solution possible to find a consensus formula that would avoid a debate that would reopen old wounds," a senior diplomat who asked not to be named told AFP news agency.
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Stylesnob
garden tools for gardeners
Subject: EU heads meet for summit as austerity takes hold 
Fri Oct 29, 2010 2:21 am
