This is the year in which the European Union revises its lofty economic ambitions. As well as overhauling the Lisbon agenda of structural reforms, the EU is now close to reforming the stability and growth pact, the rules underpinning fiscal policy, with finance ministers last night discussing compromise proposals.

The new stability pact will be an improvement over the original. It will be more pragmatic and more flexible. The threat of a financial penalty will be maintained, but only in cases of serious breach. It will be a much friendlier pact - it speaks of peer support rather than peer pressure.