After lengthy talks on adjusting the Stability and Growth Pact, ministers told Athens to cut its deficit after massive revisions to budget data showed it had exceeded the EU deficit limit every year since 1997.
That highlighted a debate over the reliability of government accounts, but also the discontent that the pact has generated in France and Germany as the eurozone's two biggest economies fell foul of the deficit limits.
The pact was established in the 1990s as a guarantee against government profligacy when the euro was launched, which ECB
Luxembourg Prime Minister Jean-Claude Juncker said there was progress on a revamp of the pact but dismissed suggestions that the pact will end up toothless and said a deal was on the cards for March, when EU leaders meeting in Brussels.
"We're not scrapping the pact," he said, adding there would be "no clash of the Titans" and that states would be judged on merit, not size or diplomatic clout under the modified rules.
"There will be no slide into political assessment," he said.
France and Germany breached the deficit limit of the pact, 3 percent of gross domestic product, for a third year in 2004 but repelled attempts by the European Commission to take them to task.
Diplomats say one of the main strands of a revamp may be a more liberal let-off clause for countries with slow growth.
The warning Greece received was the closest a country has gone to fines under the pact in its current form. Greece was told to show plans in March on how to get back in line by 2006.
AIRLINE TAX: France and Germany have teamed up to press for an airline tax to fund increased aid for development and fighting AIDS and malaria, sometimes described as the "silent tsunamis" that kill millions every year.
A diplomat, speaking on condition of anonymity, said ministers had decided to commission the study by the so-called Economic and Financial Committee (EFC), which does the groundwork for their meetings.
"The EFC is going to draw up a study on how one could implement a kerosene tax or a tax on plane tickets," the source said.
French President Jacques Chirac recently proposed the tax, and Germany supports the idea of pushing ahead with this in Europe if the wider world refused to follow. The Dutch and Austrians backed the idea although Austrian minister Karl-Heinz Grasser opened up a new debate by saying such a tax could raise up to 20 billion euros according to OECD estimates and that half of this could be put in the EU's central budget.
One newspaper said the tax could add 5 or 10 euros to a plane ticket.