WROCLAW, Poland - Poland's finance minister said Friday that after a yearlong dispute, his European Union counterparts have signed off on tougher budget rules that punish overspending governments.
Jacek Rostowski said that the 27 ministers approved at their meeting in Wroclaw, Poland, a compromise that Polish officials had worked out with the European Parliament earlier this week.
Under the new rules, it will be easier to put sanctions on governments that breach the EU's limits on debts and deficits. Governments who ignore warnings that they risk breaking debt rules can also be punished.
For years European countries -- including Germany and France -- have broken the EU rule requiring deficits to be kept below 3 per cent of gross domestic product. Experts say that the lack of accountability has helped cause the rise in government debt that is currently afflicting the region.
The eurozone ministers are under intense pressure to find solutions to the debt crisis that has hobbled their 17-nation currency union for almost two years.
U.S. Treasury Timothy Geithner's presence at the informal meeting -- the first time for an American Treasury chief -- was an indication of the international pressure building on European officials to fix their crisis and keep it from hurting the global economic recovery.
