Germany to propose unelected 'stability council' for EU

This council should be given the power to slap sanctions on countries to ensure they cut their deficits and monitor use of financial assistance. The plans would also require that a German-style 'debt brake' be written into national constitutions.

But the new body would also be empowered to carry out 'competitiveness tests' amongst eurozone states to see if labour market policies are sufficiently competitive. The tests would also assess the innovation climate.

"If you fail them, there should be consequences," he said, speaking to reporters in Berlin.

The stability council would be independent of voters so as to avoid “political pressure” and could impose sanctions automatically.

Roesler said that Germany would be bringing the proposal to the next meeting of EU finance ministers.

However, it appears that the minister, head of the free-market-liberal Free Democrats, has not cleared the ideas with his Christian Democrat coalition partners.

"This is an opinion of the ministry and not a government position," the Financial Times Deutschland reported government officials as saying.

The Free Democrats are struggling in the polls and the radical proposals could be read as an attempt to shore up the party's base.

Separately, Greece's finance minister, Evangelos Venizelos, called on states to work quickly to implement the 21st July agreement between eurozone leaders that extends the power of EU bailout funds.

On Tuesday, he said that action must be taken swiftly to hold back a global crisis, according to a statement from the finance ministry following a conversation between the minister and top EU officials including the head of the Eurogroup of states, the EU economy commissioner, and the director of the Institute of International Finance, (IIF) bank lobby group.