All EU nations except Britain and the Czech Republic agreed at a summit last night to join a fiscal pact aimed at preventing future debt crises.

EU president Herman Van Rompuy said: "25 member states join and will sign the fiscal compact."

Britain had already refused to join the pact in December while officials said the Czech Republic indicated that it must first secure ratification back home before it can take part.

The pact, pushed by Germany, will require governments to introduce laws on balanced budgets and impose near automatic sanctions on countries that violate deficit rules.

An agreement emerged after France and Poland overcame a dispute over Polish demands for non-euro nations to have a seat at eurozone summits.

The treaty must be formally signed in early March and will come into force once 12 nations have ratified it.

French President Nicolas Sarkozy voiced suprise at Prague's U-turn on the pact after the country had backed the project at the December summit.

"Why is it that something acceptable in December no long is today?" Sarkozy said at a post-summit press conference.

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