European Union (EU) leaders endorsed an agreement between 17 eurozone countries on the treaty for the European Stability Mechanism (ESM), or the permanent rescue fund, at a half-day summit on Monday.

"We call on finance ministers to sign it at the next Eurogroup meeting, so that it can take effect from July 2012," European Council President Herman Van Rompuy said at a press conference.

The 500-billion-euro (661 billion U.S. dollars) ESM will enter into force a year earlier than first planned, in a bid to better help indebted states out of the sovereign debt crisis across Europe.

"The early entry into force of this permanent firewall will prevent contagion in the euro area and further restore confidence," Van Rompuy added.