EU finance ministers have discussed allowing fellow member states to vet their budgets before their national parliaments see them. They also warned that there is no way around budget cuts for struggling economies.
Finance ministers are setting up a bail-out fund worth 439 billion euros
Despite the infighting over how to deal with Europe's economic problems, this latest finance ministers meeting in Luxembourg produced some concrete results.
Finance ministers started setting up a new 439 billion euro ($525 billion) bail-out fund for Europe's most troubled economies.
And some EU member states have agreed to open up their books for scrutiny by their peers, even before their national parliaments get to see them.
Spain's finance minister Elena Salgado Mendez, whose country holds the rotating EU presidency, insisted any preventative steps were better than none.
"I think what we are talking about is about more coordination, more preventive measures to have this Stability and Growth Pact really working," Mendez said.
EU finance ministers met in Luxembourg to discuss how to deal with Europe's debt
Cuts are coming
The EU's economic affairs commissioner, Olli Rehn, welcomed the Spanish government's decision to press ahead with spending cuts, despite protests against public sector pay cuts. Rehn commended Germany for its own austerity program, saying there was no alternative to spending cuts.
"All countries should consolidate at the latest next year, 2011, as Germany is doing, while the countries who have no or limited fiscal space will have to start accelerate and intensify consolidation this year already, said Rehn.
The economic affairs commissioner said the German measures were clearly in line with the EU's fiscal strategy.
The weakest link
But EU Council President Herman Van Rompuy, who has set up a special economic task force, said Europe's priority must be to focus on its weakest economies.
"The first priority is to tackle those countries that have competitiveness problems...The other imbalances, and I share this view with the commission, the main problem is not the countries with a surplus, but the countries with a deficit," Rompuy said.
However, there are still tensions among EU member states, especially on cross-border economic governance. The UK has flatly rejected the proposed budget peer review system. France, meanwhile, has called on Britain to toe the EU line.
Author: Nina-Maria Potts (smh)
Editor: Chuck Penfold