"We have to tackle the competitiveness gaps" in the 16-nation eurozone, French President Nicolas Sarkozy said.

France and Germany plan to present new proposals to address the problem. But they did not pledge new bail-out cash.

The leaders were speaking after an EU summit which saw agreement on a permanent mechanism to help any eurozone nation crippled by debts.

The European Council President, Herman Van Rompuy, said EU leaders "have... the political will to do whatever is required to ensure the eurozone's stability".

The 27 leaders, meeting in Brussels on Thursday, agreed that in 2013 the permanent mechanism would succeed the eurozone's 750 billion euro temporary bail-out fund, the European Financial Stability Facility (EFSF).

But the summit conclusions on Friday noted that "only a very limited amount has been committed from the EFSF to support the Irish programme".

The European Central Bank (ECB) has been buying billions of euros of sovereign debt to ease the pressure on the countries seen as most vulnerable in the eurozone. It is to double the reserves it holds - to 10.8 billion euros, from 5.8 billion euros at present.