THE BBC NEWS said that ;the International Monetary Fund (IMF) has told the eurozone bloc to speed up budget cuts or risk eroding the confidence of financial markets.
In a hard-hitting report, the IMF said the current "crisis management" was no alternative to fundamental economic restructuring. It is believed that the IMF report suggest that the economic crisis was due to "unsustainable policies".
The EU officials hoped that the official go-ahead for the 750bn euro ($893bn; £618bn) fund - first announced last month - will calm investors who are worried about the lack of a safety net for European governments who cannot repay mounting debt.
In other developments, EU finance ministers agreed to design new rules that will allow nations to intervene before countries become too laden down by debt - essentially meaning national budgets should be shown to European partners before they are fixed at home
The British Prime Minister David Cameron is quoted in the BBC News warning that dealing with the deficit would be "unavoidably tough" and affect "our whole way of life". An emergency budget detailing the cuts is being held in two weeks.
Further sovereign debt worries and the possibility of a double-dip recession consumed European markets on Monday. Reliable sources said that, Hungary has been the latest country to stir investor concern after government officials compared the country's fiscal position with Greece late last week.
The BBC also said that the IMF, which is contributing to the rescue fund, continued: "The current euro area crisis results from fiscally unsustainable policies in some countries, delayed repair of the financial system, insufficient progress in establishing the discipline and flexibility needed for a smooth functioning of the monetary union, and deficient governance of the euro area."
The organisation said that some eurozone countries needed to open their trade markets and loosen employment regulations in order to avoid "anaemic growth" in the coming years.
The EU loan scheme, which ministers rubber-stamped on Monday, is aimed at preventing troubled economies having to borrow at high prices on the open markets, exacerbating their problems.
The markets expect that Portugal, Ireland, Spain and Italy are most likely to call on help from the fund.
However, it is said that accessing emergency loans would be "strictly conditional" on recipients agreeing to certain criteria such as spending cuts - just as with the bail-out agreed for Greece, said EU economic and monetary affairs commissioner Olli Rehn.
The financial rescue package includes a special purpose vehicle to borrow up to 440bn euros for emergency funds.
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