EU finance ministers ordered Portugal to move faster to cut its excessive budget deficit and signalled similar warnings to Germany and France for stepping out of line.
At their monthly meeting, the ministers sought to restore confidence in the EU's battered Stability and Growth Pact, which curbs budget deficits to underpin the euro, amid fears its rules are being increasingly flouted or watered down.
Portugal was told to bring its deficit below the EU limit of 3 per cent of gross domestic product by the end of this year instead of March 2003.
Germany is in the same boat, with the Commission projecting a 3.7 per cent deficit this year, and France is also in trouble for making no effort to cut next year's deficit after Paris put growth ahead of reaching budget targets agreed with EU peers.
European Commission President Mr Romano Prodi, who called the Stability Pact "stupid" and rigid last month, explained himself to euro zone finance ministers last night and satisfied critics such as Austria that he was still fully behind the pact.
German Finance Minister Mr Hans Eichel acknowledged his country faced the humiliation of the EU launching an excessive deficit procedure, a public "naming and shaming" ordeal.
The Commission will makes its move on November 13th, when it completes an annual economic assessment of EU members.
The ministers also agreed common disclosure rules for issuers of shares and bonds in a move to cut companies' costs when raising capital in Europe and reviewed deadlocked talks on taxing cross-border savings.