EU nations sign treaty to stop overspending

EU nations except Britain and the Czech Republic agreed yesterday to sign a new treaty designed to stop overspending in the eurozone and bring to an end the bloc's crippling debt crisis, as EU leaders also vowed to stimulate growth and employment.

The new treaty, called the fiscal compact, was agreed at a summit of European leaders in Brussels yesterday and includes strict debt brakes, making it more difficult for countries that run up deficits escape sanctions. The 17 countries in the eurozone hope the tighter rules would convince investors that all of them would get their debts under control and boost confidence in their joint currency.

"We have a majority of 25 that will now sign up to the fiscal compact," Swedish prime minister Fredrik Reinfeldt said last night following the summit of European heads of government in Brussels.

Though the new rules apply to the 17 euro states only, the the currency union is looking for broad support from the other EU states, to see accord was eventually integrated into the main EU treaty.

Britain had declined to sign the new treaty in December and Reinfeldt said the Czech Republic did not sign due to parliamentary procedural problems.

"I don't want to stand in the way of what they think they should do," British prime minister David Cameron said of the other countries. "But this is not an EU treaty because I vetoed that."