A group of countries including Germany and the UK have thrown their weight behind an EU proposal to fine member states for failing to cut their budget deficits.
European Commission president José Manuel Barroso (pictured) is set to unveil a proposal on Wednesday requiring nations with public debts exceeding 60% of GDP to reduce the excess by 5% each year for three years or face a fine, reports the Financial Times.
But in proposals set out in a letter to all 27 EU members, German finance minister Wolfgang Schäuble goes further and suggests nations repeatedly over-shooting the deficit limits should have EU development funding and voting rights suspended.
According to European officials, a bloc of countries led by Germany, and including the UK and Netherlands, are pressing hard for the fines to be implemented automatically when benchmarks are breached.
But the proposal has generated unease from the likes of France and Italy who say the automatic imposition of fines amounts to an erosion of national sovereignty.
The divisions within the EU over the budget deficit proposal comes amid growing signs of economic divergence within the eurozone between strong players such as Germany and those worse hit by the debt crisis.
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