The European Union's newly relaxed fiscal rules are being greeted with relief across central Europe, where governments have been trying, with varying success, to rein in budget deficits in the hope of adopting the euro before the end of the decade.

The new agreement allows countries to break more easily the growth and stability pact's deficit limit of 3 per cent of gross domestic product, a condition that also applies to EU members which have not yet entered the eurozone. More crucially, countries that have reformed their pension systems will be allowed to take those costs into account over the next five years.