EU agrees to debt fund and budget reviews

European Union finance ministers meeting in Luxembourg agreed Tuesday to a number of measures to try and avoid Greek-style debt crises hitting other countries in the eurozone. They include the creation of an emergency debt fund and the right to oversee national budgets.

Reuters

Leaders across Europe have warned there is no alternative to making austerity cuts. Even Germany slashed 86 billion euros from government spending on Monday.

With fears over Hungary adding to concern about debt crises, the ministers pledged the creation of a 440-billion-euro emergency fund to assist debt-stricken nations.

Portugal, Ireland, Spain and Italy are most likely to call on help from the fund, but EU economic and monetary affairs commissioner Olli Rehn warned that obtaining "strictly conditional" loans could be as long and complicated as the case in Greece.

"The essential thing is that this is based on the same kind of conditionality as the rescue package for Greece," he said.

EU president Herman Van Rompuy said they also agreed to have national budgets submitted to review by other member states.

But Britain categorically rejected such a review before its own parliament had approved financial measures.

"There is no question of anyone other than MPs seeing it first," said Financial Secretary to the Treasury Mark Hoban . "Once the chancellor has presented it to parliament, it is, of course, publicly available."

Top international bankers and investors will be in Vienna Wednesday for a three-day meeting to discuss European financial integration and Europe's role in the global economy.