In a new report, the IMF issued a warning to EU countries which fail to rein in deficits.

The Reforming the EU Fiscal Framework: Strengthening the Fiscal Rules and Institutions report, released on Monday, stressed that deficits and debt ratios threaten monetary stability in the union.

The IMF proposed "a new framework based on risk-based EU-level fiscal rules, strengthened national institutions, and an EU fiscal capacity."

On the reference values of 3 percent deficit and 60 perent debt ratio for EU countries, the IMF said these values would remain.

- Establishing a well-designed EU fiscal capacity would enhance resilience and address longer-term challenges facing the EU - it added.