BRUSSELS, Dec 15, 2023 (BSS/AFP) - EU finance ministers will hold an extraordinary meeting by video link on December 20 in a last-ditch effort to strike a deal on reforming spending rules.

The European Union wants to overhaul its fiscal rules, which are considered by many capitals too strict, and to give states more flexibility and room to invest.

A Spanish diplomat, whose country holds the rotating EU presidency, said the meeting was "scheduled for December 20".

If ministers do not agree before the end of the year, the old rules, known as the Stability and Growth Pact, kick in again on January 1, 2024, after being suspended during the coronavirus pandemic.

The reform has divided the bloc, and ministers were unable to reach a deal last week, even after a working dinner that stretched into the early hours of the next day.

The current rules say states must keep debt below 60 percent of gross domestic product and deficits below three percent of GDP.

Germany and France have been at loggerheads recently over deficit reduction limits.

Berlin says there must be "safeguards" to ensure that member states reduce excessive deficits annually, while Paris wants to give wiggle room to encourage countries to invest in key areas for the EU, such as the green and digital transitions.