Spanish deficit tests Europe's fiscal treaty

After a relatively smooth drafting process, the most difficult part of bringing the new rules into force begins. All participating governments have to ratify the treaty, either through parliamentary or popular votes — a process that may prove difficult in some places.

The biggest challenge may lie in Ireland, which has decided it must hold a public referendum to ratify the agreement. This could be a risky proposition — Irish voters initially rejected the EU's previous two treaties in such referendums, delaying European progress toward closer cooperation.

This time, EU leaders have ensured that Irish voters cannot block the fiscal pact. Unlike earlier treaties, this one does not require unanimous support to become law. It will come into force once 12 of the eurozone's 17 members ratify it.

An Irish rejection would chiefly undermine Ireland's own ability to keep paying its bills. The fiscal treaty proposes to prevent any abstaining eurozone countries from receiving loans from the eurozone's future financial backstop, the European Stability Mechanism.

Economists believe Ireland may require a new round of loan aid in 2013 once its current flow of EU-International Monetary Fund bailout funds runs out.

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Don Melvin and Slobodan Lekic in Brussels and Shawn Pogatchnik in Dublin contributed to this story.