EU Economy Commissioner Olli Rehn said the EU's moves would ensure that national governments' spending plans were "consistent with European objectives." They will also "lead to a substantial deepening and prudent widening of the economic and monetary union," he said. Heavy government debt loads have raised fears of government default, financial panic and even the breakup of the euro zone - fears calmed for the moment by a 750 billion euros ($1 trillion) bailout package announced Monday by euro zone countries and the International Monetary Fund. The size of the EU fund initially lifted markets by reassuring them that countries would not default. But economists are saying the mere presence of that backstop for shaky government finances eases the pressure on national politicians to keep debt and deficit within strict limits, and that more available loans will not help if Europe doesn't get a grip on running up debt in the first place.

The EU is now calling for governments to place more emphasis on cutting their mounting debt, replacing the EU's existing focus on budget deficits - the yearly differences in public spending and income. European governments have been loaded with debt from the high costs of saving banks and paying out far more to support economies and welfare systems during the recent recession. The EU average increased to 80 percent of national income, above the 60 percent legal limit originally set up to safeguard the euro.

EU Commission President Jose Manuel Barroso suggested that countries that aren't doing enough to cut debt in good times should for the first time face real punishment - such as "imposing interest-bearing deposits" - essentially forcing governments to pay a financial penalty that could eventually be returned to them. This adds another weapon to the EU executive's paltry enforcement arsenal. It currently has the possibility of punishing badly behaving governments by holding back EU funding for major infrastructure projects. "Without sanctions it will not be enough in credibility," Barroso told reporters. "It is important for member states to respect the stability and growth pact." In practice, the EU suggestions would see euro zone governments jointly monitor each others' economies and could mean that EU finance ministers would discuss budget programs with other EU nations before they put them to their own parliaments - a radical change to the powers that nations have over their own economies. Barroso said he believed national lawmakers would support their governments having a say over other euro zone budgets because the current crisis has show the "huge ramifications" and costs to the group of each country going it alone with reckless spending. "What we are suggesting is for there to be an assessment of draft budgets and see if this fits in well with what goes on elsewhere in Europe because national measures have an effect on others," he said. "You can't have a monetary union without an economic union and this is the absolute prerequisite for having monetary union," he said.