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Proposal to give EU greater authority over national budgets set for discussion at Oct. summit

The 17 countries that use the euro would have to enter into contracts with the European Union that would bind them to implement specific economic policies and reforms, under proposals that would amount to a significant increase in power for the central EU government.

The proposals are contained in a document prepared by the office of Herman Van Rompuy, who is president of the European Council — the body composed of the leaders of the 27 EU countries. They are meant as a starting point for discussions among the leaders when they meet this month at a summit in Brussels.

The proposal also raises the prospect that countries fulfilling their promises would get some sort of financial reward. The details have yet to be spelled out.