4 November 2010 Last updated at 14:15 ET 
With the EU expecting all member-states to have achieved a maximum budget deficit of 3% of GDP by the financial year 2014-15, what belt-tightening measures are the countries taking?
It had already pledged to make 15bn euros of savings by 2014. But it then decided to bring 40% of those forward to 2011 to try to restore confidence after yields on 10-year bonds soared, with investors becoming more sceptical of the country's ability to pay off its debts.
In September the government announced that the cost of bailing out the Republic of Ireland's stricken banks had risen to 45bn euros (£39bn), opening a huge hole in the government's finances.
The increased cost will see the government run a budget deficit equivalent to 32% of GDP this year.
It intends to bring that down to 2.9% by 2015.
Government spending has been slashed by 4bn euros, with all public servants' pay cut by at least 5% and social welfare reduced.
Child benefit was cut by 16 euros a month, bringing the lower rate to 150 euros a month and the higher rate to 187 euros a month.
A carbon tax has been brought in, set at 15 euros per tonne of CO2.
Bad news came in September when figures showed the economy had shrunk in the second quarter from the previous three months.
Savings believed to amount to about £83bn (95bn euros, $131bn) are due to be made over four years.
The Chancellor, George Osborne, told parliament that 490,000 public sector jobs would be cut over four years because the country had "run out of money". Experts predict a similar number of job losses in the private sector.
Most Whitehall departments face budget cuts of 19% on average while the defence budget will be cut by 8%. The retirement age is to rise from 65 to 66 by 2020.
Some incapacity benefits will be time-limited and other money will be clawed back through changes to tax credits and housing benefit. A new bank levy will also be brought in.
While there was no widespread industrial unrest ahead of the cuts' announcement, the general secretary of trade union Unison, Dave Prentis, accused the government of "taking a chainsaw" to public services for ideological reasons. The opposition Labour Party accused the government of a "slash and burn" policy.
Some of this money is expected to be saved through closing tax loopholes and withdrawing temporary economic stimulus measures.
President Nicolas Sarkozy's plans to raise the retirement age from 60 to 62 and the full state pension age from 65 to 67 provoked major protests and strikes.
The demonstrations regularly attracted more than a million people on to the streets. French riot police were brought in to re-open fuel depots blocked by protesters, although the demonstrations have been largely peaceful.
The government pressed on and the measures have now been approved by parliament.
As an additional austerity measure, the highest earners will also be required to pay an extra 1% income tax.
It has started drawing on the bail-out money because a sharp downgrade of its sovereign debt rating made its borrowing costs soar.
The aim is to slash the budget deficit from 13.6% of GDP.
The country has started cracking down on tax evasion, and on corruption within the tax and customs service. It will also curb its widespread early retirement schemes. The average retirement age is set to rise from 61.4 to 63.5.
Under the plan to slash the budget by 30bn euros (£26bn; $37bn) over three years Greece aims to: scrap bonus payments for public sector workers; freeze public sector salaries and pensions for at least three years; increase sales tax (VAT) from 19% to 23%; raise taxes on fuel, alcohol and tobacco by 10%.
The harsh measures have triggered public sector strikes and violence on the streets of Athens.
But the new government will have to rely on the radical Freedom Party to enact legislation and there are doubts about its long-term viability.
Madrid has promised European counterparts to cut its deficit to 6% of its gross domestic product (GDP) next year, from 11.1% last year.
Government workers face a pay cut of 5%, starting in June, and salaries will then be frozen for 2011.
A tax rise of 1% will be applied to personal income above 120,000 euros.
Smaller savings include an end to a 2,500-euro cash payout for new mothers, known as "baby cheques".
Unemployment has more than doubled - to about 20% - since 2007.
Romania's economy shrunk more than 7% in 2009 and it needed an IMF bail-out in order to meet its wage bill.
It says it needs to implement new austerity measures to qualify for the next instalment of the 20bn-euro ($25bn; £17bn) IMF loan.
Angry protests have greeted the cuts and Interior Minister Vasile Blaga resigned after thousands of police officers went on strike over the 25% pay cut.
Italy aims to cut public sector pay and freeze new recruitment. Public sector pensions and local government spending are also being targeted, and there are plans to crack down on tax evasion.
Funding to city and regional authorities is expected to be cut by more than 13bn euros.
For the next three years there will be a freeze on public sector pay rises and cuts in public sector hiring, replacing only one employee for every five who leave.
Progressive pay cuts of up to 10% are planned for high earners in the public sector, including ministers and parliamentarians.
Retirement will be delayed by up to six months for those who reach retirement age in 2011.
Provincial governments serving fewer than 220,000 inhabitants will be scrapped, as will several publicly funded think-tanks.
The total deficit in 2009 was 3.1%, but is projected to grow to more than 5% this year.
"Germany has an outstanding chance to set a good example," said German Chancellor Angela Merkel.
The plans include a cut in subsidies to parents, 10,000 government job cuts over four years, and higher taxes on nuclear power. The rebuilding of the baroque Stadtschloss palace in the heart of Berlin will also be postponed.
Top earners in the public sector, including politicians, will see a 5% pay cut.
VAT will rise by 1% and there will be income tax hikes for those earning more than 150,000 euros. By 2013 they will face a 45% tax rate.
By 2013 military spending will have been cut by 40% and the government is delaying the launch of two high-speed rail links - the Lisbon-Porto and Porto-Vigo routes.
(from BBC.co.uk )
EU austerity drive country by country
Romanian policemen have been among those resisting cuts
A new austerity drive has been sweeping across Europe, as governments struggle to trim huge budget deficits and the 16-nation eurozone races to reassure sceptical markets.
EU finance ministers have agreed rules that will automatically punish member-states which break budgetary rules.With the EU expecting all member-states to have achieved a maximum budget deficit of 3% of GDP by the financial year 2014-15, what belt-tightening measures are the countries taking?
REPUBLIC OF IRELAND
The government has announced it will trim the deficit by 6bn euros (£5.2bn) in 2011 - the toughest budget in the nation's history.It had already pledged to make 15bn euros of savings by 2014. But it then decided to bring 40% of those forward to 2011 to try to restore confidence after yields on 10-year bonds soared, with investors becoming more sceptical of the country's ability to pay off its debts.
In September the government announced that the cost of bailing out the Republic of Ireland's stricken banks had risen to 45bn euros (£39bn), opening a huge hole in the government's finances.
The increased cost will see the government run a budget deficit equivalent to 32% of GDP this year.
It intends to bring that down to 2.9% by 2015.
Government spending has been slashed by 4bn euros, with all public servants' pay cut by at least 5% and social welfare reduced.
Child benefit was cut by 16 euros a month, bringing the lower rate to 150 euros a month and the higher rate to 187 euros a month.
A carbon tax has been brought in, set at 15 euros per tonne of CO2.
Bad news came in September when figures showed the economy had shrunk in the second quarter from the previous three months.
UK
The Conservative-Liberal Democrat coalition government has announced the biggest cuts in state spending since World War II.Savings believed to amount to about £83bn (95bn euros, $131bn) are due to be made over four years.
The Chancellor, George Osborne, told parliament that 490,000 public sector jobs would be cut over four years because the country had "run out of money". Experts predict a similar number of job losses in the private sector.
Most Whitehall departments face budget cuts of 19% on average while the defence budget will be cut by 8%. The retirement age is to rise from 65 to 66 by 2020.
Some incapacity benefits will be time-limited and other money will be clawed back through changes to tax credits and housing benefit. A new bank levy will also be brought in.
While there was no widespread industrial unrest ahead of the cuts' announcement, the general secretary of trade union Unison, Dave Prentis, accused the government of "taking a chainsaw" to public services for ideological reasons. The opposition Labour Party accused the government of a "slash and burn" policy.
FRANCE
France has announced plans to cut spending by 45bn euros (£39bn) over the next three years in order to meet the budget deficit target.Some of this money is expected to be saved through closing tax loopholes and withdrawing temporary economic stimulus measures.
President Nicolas Sarkozy's plans to raise the retirement age from 60 to 62 and the full state pension age from 65 to 67 provoked major protests and strikes.
The demonstrations regularly attracted more than a million people on to the streets. French riot police were brought in to re-open fuel depots blocked by protesters, although the demonstrations have been largely peaceful.
The government pressed on and the measures have now been approved by parliament.
As an additional austerity measure, the highest earners will also be required to pay an extra 1% income tax.
GREECE
The Greek government has pledged to end its economic woes to make drastic spending cuts and boost tax revenue in return for a 110bn-euro (£95bn) bail-out from the EU and International Monetary Fund.It has started drawing on the bail-out money because a sharp downgrade of its sovereign debt rating made its borrowing costs soar.
The aim is to slash the budget deficit from 13.6% of GDP.
The country has started cracking down on tax evasion, and on corruption within the tax and customs service. It will also curb its widespread early retirement schemes. The average retirement age is set to rise from 61.4 to 63.5.
Under the plan to slash the budget by 30bn euros (£26bn; $37bn) over three years Greece aims to: scrap bonus payments for public sector workers; freeze public sector salaries and pensions for at least three years; increase sales tax (VAT) from 19% to 23%; raise taxes on fuel, alcohol and tobacco by 10%.
The harsh measures have triggered public sector strikes and violence on the streets of Athens.
NETHERLANDS
The centre-right coalition formed after months of negotiation on 8 October said it wanted to cut the budget by 18bn euros ($24bn; £15bn) by 2015.But the new government will have to rely on the radical Freedom Party to enact legislation and there are doubts about its long-term viability.
SPAIN
The Spanish government has approved an austerity budget for 2011 which includes a tax rise for the rich and 8% spending cuts.Madrid has promised European counterparts to cut its deficit to 6% of its gross domestic product (GDP) next year, from 11.1% last year.
Government workers face a pay cut of 5%, starting in June, and salaries will then be frozen for 2011.
A tax rise of 1% will be applied to personal income above 120,000 euros.
Smaller savings include an end to a 2,500-euro cash payout for new mothers, known as "baby cheques".
Unemployment has more than doubled - to about 20% - since 2007.
ROMANIA
The government proposed wage cuts of 25% and pension cuts of 15% in July in order to reduce the country's budget deficit.Romania's economy shrunk more than 7% in 2009 and it needed an IMF bail-out in order to meet its wage bill.
It says it needs to implement new austerity measures to qualify for the next instalment of the 20bn-euro ($25bn; £17bn) IMF loan.
Angry protests have greeted the cuts and Interior Minister Vasile Blaga resigned after thousands of police officers went on strike over the 25% pay cut.
ITALY
The Italian government has approved austerity measures worth 24bn euros for the years 2011-2012. The cuts amount to about 1.6% of Italian GDPItaly aims to cut public sector pay and freeze new recruitment. Public sector pensions and local government spending are also being targeted, and there are plans to crack down on tax evasion.
Funding to city and regional authorities is expected to be cut by more than 13bn euros.
For the next three years there will be a freeze on public sector pay rises and cuts in public sector hiring, replacing only one employee for every five who leave.
Progressive pay cuts of up to 10% are planned for high earners in the public sector, including ministers and parliamentarians.
Retirement will be delayed by up to six months for those who reach retirement age in 2011.
Provincial governments serving fewer than 220,000 inhabitants will be scrapped, as will several publicly funded think-tanks.
GERMANY
The German government has proposed plans to cut the budget deficit by a record 80bn euros ($96bn; £66bn), or 3% of GDP, by 2014.The total deficit in 2009 was 3.1%, but is projected to grow to more than 5% this year.
"Germany has an outstanding chance to set a good example," said German Chancellor Angela Merkel.
The plans include a cut in subsidies to parents, 10,000 government job cuts over four years, and higher taxes on nuclear power. The rebuilding of the baroque Stadtschloss palace in the heart of Berlin will also be postponed.
PORTUGAL
The Socialist government of Jose Socrates has announced a range of austerity measures aimed at cutting the deficit to 7.3% this year and 4.6% in 2011.Top earners in the public sector, including politicians, will see a 5% pay cut.
VAT will rise by 1% and there will be income tax hikes for those earning more than 150,000 euros. By 2013 they will face a 45% tax rate.
By 2013 military spending will have been cut by 40% and the government is delaying the launch of two high-speed rail links - the Lisbon-Porto and Porto-Vigo routes.
(from BBC.co.uk )
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