EU Commission warns Spain, Italy that budgets risk breaking rules aimed at controlling debt

European Union officials have cautioned Spain and Italy that their budget plans risk breaching EU rules aimed at keeping deficits and debt under control.

For the first time, the EU's executive commission is reviewing draft budgets before national legislatures pass them. The review is aimed at preventing budget troubles from undermining the shared euro currency.

Italy, the No. 3 economy in the 17-country eurozone, was cited Friday for not sufficiently addressing its heavy debt load. Spain, the No. 4 economy, was warned its deficit would breach the EU limit of 3 percent of annual economic output.

Smaller euro members Finland, Luxembourg and Malta were also warned.

The debt and deficit rules were toughened after government debt grew to unmanageable levels in several eurozone countries, threatening the currency union with breakup.