24 May 2010

Tougher handling of EU members' budgets pledged

9:01 am on 24 May 2010

EU finance ministers have agreed to be tougher on member states' budgets in the wake of the Greek debt crisis.

Following criticism that Europe did too little, too late, to defend the euro, they have pledged to react quicker and more efficiently in future.

At the first meeting of a new EU economic taskforce on Friday, they agreed new sanctions were needed to enforce rules.

The BBC reports that countries that break deficit limits could lose membership or voting rights in the single currency club.

The meeting in Brussels came at the end of another week of turmoil on the markets in the aftermath of the debt crisis in Greece.

The euro fell to its lowest level for four years against the dollar and share markets saw big sell-offs.

With additional concerns about the level of debt in Spain, Portugal and other countries, the fear has been that the crisis could harm the wider European economy.

After a week of losses, the Dow Jones index closed 125 points higher on Friday, or 1.25%, at 10,193.

European markets were all down more than 3% last week.