The European Commission will make more detailed proposals of changes to EU budget rules on June 30 focusing on early budget coordination, reducing debt and more sanctions for rule breakers, an EU source said.
The Commission, executive arm of the 27-country European Union, will also offer further detail of plans for ensuring EU budget rules are reflected in national law and on the surveillance of competitiveness divergences in the bloc.
The proposals are part of EU efforts to overhaul its budget rules and put public finances on a sustainable path to regain the confidence of financial markets, which are increasingly concerned about the ability of some countries to service debt.
EU leaders are to endorse such changes to the rules later on Thursday, draft conclusions of their summit in Brussels showed.
"The Commission will further fast-track its work on economic governance," an EU diplomat said. "The Commission will present further details in a political communication on June 30 which will then be followed by proposals in mid-September."
The Commission is a key player in a team of EU finance ministers, called the Task Force, which is to prepare the rule overhaul by October.
Early coordination would entail submitting key numbers from future budget plans, together with planned structural reforms, to the Commission and EU finance ministers for review to make sure policies are in line with EU rules.
The Commission will also detail how debt levels, which until now have received little attention, can play a bigger role in EU budget rules.
The EU executive has suggested that if a country does not reduce its debt quickly enough to below the bloc's ceiling of 60 percent of gross domestic product, the state would remain under a disciplinary procedure that could entail fines.
The Commission is also to present a broader arsenal of incentives and sanctions to ensure countries pay attention to EU budget rules, including one that says all governments should strive to achieve a budget close to balance or in surplus.
It will detail measures to ensure EU members' national budgetary laws reflect those of the EU and set up ways to monitor competitiveness divergences in the bloc.
