NEW YORK (CNNMoney) -- European Union finance ministers reached an agreement Friday on a package of reforms aimed at strengthening economic governance across the monetary and currency union.
The final draft of the so-called six-pack regulations was hammered out between representatives of the European Council and the European Parliament at the EcoFin meeting in Poland.
The five regulations and one directive are part of a strategy to boost economic competitiveness and encourage fiscal discipline across the 27 member European Union.
The reforms include tightening the criteria EU nations must meet in terms of debt levels and deficits. In addition, the ministers agreed to automatically impose sanctions on member states that fail to comply with budget rules and beefed up surveillance measures.
The authorities also pledged to increase transparency around the decision-making process, with the establishment of "economic dialogue" across the Byzantine EU political structure.
In a statement issued late Friday, the ministers said the agreement sets the stage for official approval at the next meeting of the European Parliament later this month. The measures will then be formally adopted by the Economic and Financial Affairs Council in October.
"The agreement constitutes a strong signal towards the investors and financial markets," the statement read. "Being a visible evidence that the EU and its institutions are able to act unequivocally, also it clearly proves Europe's capability to respond decisively to the challenges."
European leaders have been scrambling to calm jittery markets amid fears of a spiraling sovereign debt crisis and a looming credit crunch. The European Central Bank and four other monetary authorities announced a coordinated action Thursday aimed at boosting the flow of dollars to banks that might need them.
Beyond dealing with the immediate crisis, EU leaders have been calling for greater coordination of economic policymaking among the nations that use the euro.
German Chancellor Angela Merkel and French President Nicolas Sarkozy have pledged to defend the euro, arguing that greater economic "integration" is the best way to do so.
The leaders of Europe's two largest economies have proposed that balanced budget proposals be written into individual EU member nations' constitutions, in what they're calling a 'golden rule.'
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