The European Commission has said the 16 eurozone countries should lose access to EU funds and place deposits with the commission if they break the bloc's budget rules capping deficits and debt.
The proposal by the EU executive is part of the EU's efforts to sharpen budget discipline rules to prevent another debt crisis like the one experienced by Greece.
The proposal will now be studied by EU finance ministers.
Also today, the European Central Bank said it would lend eurozone commercial banks almost 132 billion euros ($162 billion) for three months.
The amount is much smaller than expected, indicating that eurozone banks appeared to be in better shape than previously feared.
compiled from agency reports