EU leaders Thursday vowed to set up a banking union during the course of 2013 after a Franco-German spat held up agreement on exactly when this vital crisis-fighting tool might come into force.
European Commission spokesman Olivier Bailly said there had been an "agreement on a political framework for the end of 2012 and a gradual implementation in 2013."
Diplomats said a final summit statement would commit the 27 EU states to "agreeing" on a supervisor for eurozone banks by year end but the new body would take longer to implement amid discord between Europe's two powerhouses.
A French government source later said that the European Central Bank would only be tasked with supervising all of the 6,000 eurozone banks at the beginning of 2014.
"The supervision will be in effect for the 6,000 banks from the beginning of 2014," this source said.
The accord would pave the way for struggling banks in debt-wracked countries like Spain to be recapitalised directly from EU bailout funds rather than their own governments having to rush to their aid.
Unlike most recent summits, held amid fears that the 17-nation eurozone was on the point of collapse, the gathering in Brussels took place against a backdrop of calmer markets although violence broke out during a strike in Greece.
Nevertheless, Paris and Berlin clashed over the best way to end the three-year crisis, with France clamouring for rapid action on a banking union and Germany insisting there was no rush.
Arriving at the summit after a tete-a-tete with German Chancellor Angela Merkel, French President Francois Hollande stressed the need to "finally put in place the banking union in the required timeframe."
Merkel for her part acknowledged the need to move "quickly" but also stressed the need for "thoroughness."
The French and German pair also appeared to clash over proposals from Berlin to beef up the power of the European Commission to supervise individual countries' budgets, handing the EU executive veto power if required.
"We could go further by granting the European level real rights to intervene in national budgets," Merkel said in a speech to the German lower house of parliament ahead of the Brussels gathering of leaders.
But Hollande retorted bluntly: "The subject of the (EU summit) is not budgetary union, it is banking union."
He also noted that Merkel "had her own deadlines," referring openly to the German general election that must be held in September or October next year.
Analysts said that markets had low expectations from this summit, but European stock markets closed higher for the fourth day as investors expressed greater confidence that the eurozone would eventually come to terms with the crisis.
But the crises in Spain and Greece continued to bubble away in the background and burst into violence in Athens, as Greek riot police fired tear gas at protesters on the sidelines of a large anti-austerity rally.
A 65-year-old protester collapsed and died from a heart attack but it was not immediately clear if his death was linked to the sporadic bursts of tear gas.
Authorities were aiming to disperse demonstrators as a general strike, the fourth this year, brought transport across the country to a virtual halt. Five people including two police, were hurt in clashes.
The Greek strike highlighted popular outrage at the tough austerity measures Athens agreed to implement in return for massive bailouts.
Meanwhile, opening the meeting, EU President Herman Van Rompuy invited all 27 EU members to attend the December awarding of the Nobel Peace Prize in Oslo, adding that the hardships the bloc now faced were nothing compared to the post-war era.
"We are facing serious difficulties today but we can draw confidence by remembering that the obstacles the builders of Europe had to overcome were frankly more daunting," Van Rompuy said.