EU debates new debt rules as euro surges

European finance ministers plan to hash out a deal on stricter budget rules to avoid another government debt crisis, as a surging euro casts doubt on the continent's fragile economic recovery.

Two differing proposals spelling out penalties for overspending governments will be considered, after ballooning debt and deficit levels in countries like Greece, Ireland and Spain shook the foundations of the 16-nation eurozone earlier this year.

The two-day gathering beginning Monday in Luxembourg comes amid the specter of a possible global currency war, as governments around the world try to boost their economies by pushing down the value of their currencies, thus making their exports more competitive.

For more: The Associated Press: EU debates new debt rules as euro surges