The battle lines over budget reform are hardening as euro zone finance ministers meet in Luxembourg to try to complete an overhaul of EU budget rules.
Germany, the Netherlands and Nordic countries want strict imposition of sanctions against those governments that exceed limits on deficits and public debt; that is in order to prevent a new sovereign debt crisis.
France, Spain and Italy are reluctant to hand over that much power to Brussels.
The European Union’s monetary affairs chief Olli Rehn has called this “the moment of truth for EU member states whether they are genuinely for reinforced economic governance or not.”
EU governments are under pressure to get their economies in order in the face of the so-called “currency war” as the rising value of the euro creates problems of competitiveness for the region’s exporters and threatens a fragile recovery.