EU clears eurozone budgets after French, Italian tweaks

The statement came after Italy and France were told that their original budgets fell short of what Brussels expected and would breach euro rules.

France's problem was its deficit - the difference between government income and spending - while Italy's was both its structural deficit and large debt pile.

Katainen laid out the complaints in letters just days after the budgets were submitted, raising much speculation about whether Paris and Rome - after some bellicose statements - would defy the commission.

But on Monday French finance minister Michael Sapin announced that he would be able to shave a further €3.6 billion off the deficit - although critics noted that no new reforms are being undertaken - while Italy said it would reduce its structural deficit more than originally promised ( by 0.3% of GDP in 2015, instead of 0.1%).

Rome also promised to do more about its debt - which is to be 133.4% of GDP in 2015.

Katainen praised the at-risk states for responding "constructively" to the commission's "concerns", with Austria, Malta and Slovenia also on Brussels' radar.

"Detailed assessment" of the draft budgets will continue before the commission adopts its formal opinion on them in November.

The review of draft budgets concerns all euro states, with the commission having won major new powers over recent years in a bid to prevent a financial crisis from re-occurring.

While member states - now in their second year of being tested - agreed to the changes there is an underlying tension about the commission being able to reject national spending plans.

The commission had to be seen to be taking a tough line with large member states France and Italy after smaller states such as Greece, Portugal, and Ireland underwent harsh austerity measures to bring them back in line with euro rules.

The green light means that the incoming commission of Jean-Claude Juncker, which formally takes office on Saturday (1 November), can begin with a clean political slate.