European stocks steady as EU leaders sign treaty

European stock markets stabilised on Friday after EU leaders signed a new treaty on budget discipline to avoid another eurozone sovereign debt crisis, but the euro slipped. In morning deals, London's FTSE 100 index of leading shares dipped 0.09 percent to 5,925.95 points, Frankfurt's DAX 30 eased 0.08 percent to 6,933.76 points and the Paris CAC 40 was flat at 3,499.56 points. The euro meanwhile retreated to $1.3252 from $1.3311 late in New York on Thursday. European Union leaders signed a new treaty to control budgets on Friday, vowing to turn the corner on the region's long-running sovereign debt crisis. Leaders from 25 of the bloc's 27 nations -- apart from the Czech Republic and Britain -- signed the treaty at a ceremony in Brussels on the second day of a summit. The treaty is "a strong signal that we are drawing lessons from the crisis and that we are focusing on the future of a politically united Europe," said German Chancellor Angela Merkel, the main architect of the pact. The countries signed up to a promise to anchor in their constitutions -- if possible -- rules to stop their public deficits and debt spiralling out of control in the way that led to the eurozone crisis. "Investors who have been looking for closure around the debt issue will be breathing a sigh of relief that at long last there appears to be some light at the end of the tunnel," said broker Andrew Crook at Sucden Financial Private Clients. "The only challenge left to leaders is convincing their national parliaments, or in the case of Ireland, convincing the people via a referendum." The Treaty for Stability, Co-ordination and Governance is a bedrock response to a two-year public debt crisis that forced bailouts for Greece, Portugal and Ireland. The treaty "helps prevent a repetition of the sovereign debt crisis," said EU president Herman Van Rompuy after the ceremonial signing in the EU's Brussels headquarters. However, some analysts remain unconvinced that the treaty will resolve the region's stubborn debt crisis. "EU leaders in signing the fiscal compact is a step forward in helping to set a framework for aligning budgets -- but it does not resolve the underlying solvency problem and lack of growth that is currently causing so many problems in Europe," said Michael Hewson at trading firm CMC Markets. "Unless EU leaders can address that issue then all this summit has done is prolong the agony for economies like Spain, Italy, Portugal and Greece." The treaty will take effect once 12 of the 25 states have ratified the pact. Ireland has already announced plans for a referendum before the treaty can apply there. If states do not ratify the treaty, they will be blocked from bailout funding from a related rescue firewall being set up as of July this year. Across in Asia, markets continued their upward trend, as investor optimism was boosted by upbeat US data alongside positive news from the eurozone. Hong Kong gained 0.81 percent, Shanghai jumped 1.43 percent, Sydney rose 0.41 percent and Tokyo added 0.72 percent.