19 OCT 2010

RTE NEWS

European Union finance ministers have agreed how to toughen the bloc's budget rules to prevent sovereign debt crises, and said rule breakers would face sanctions only six months after being warned.

The reform of the rules that underpin the euro was based on a deal reached by the French and German leaders, and is intended to stave off any repeat of the debt problems in Greece this year which threatened the future of the single currency.

'Today, the European Union made a great step forward in ... economic governance,' EU President Herman van Rompuy said after EU finance ministers met in Luxembourg.

'The package agreed ... will be the biggest reform of the Economic and Monetary Union since the euro was created.'

He will present the deal for approval by the leaders of the 27-country bloc at an EU summit in Brussels next week.

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