German economy minister Philipp Roesler has outlined proposals for European Union treaty changes to tackle the euro zone debt crisis, including setting a deficit limit of 2 per cent of gross domestic product, a German newspaper reported today.

Daily Die Welt said the ministry's strategy paper had been sent to chancellor Angela Merkel's office for consideration.

Mr Roesler, head of the junior Free Democrat (FDP) coalition party who have taken a harder line on bailing out other euro zone governments, also wants tougher automatic sanctions for countries that break deficit rules, the paper showed.

The strategy paper, entitled Stability and Competitiveness in Europe, said freezing EU payments from structural funds would be an option for punishing offending states.

"This is needed to implement solid budget policies more quickly and effectively," die Welt quoted the paper as saying.

Dr Merkel is pushing for treaty change as a way to solve the debt crisis and boost economic integration among members and EU leaders are under pressure to agree possible changes at a summit next week.

EU leaders, including French president Nicolas Sarkozy, are considering options in preparation for the summit and on Friday Merkel will address the German parliament on the crisis.

The EU is keen, however, to avoid a lengthy process of ratification which for the Lisbon Treaty took years as several countries struggled to get public backing in referendums.

Under Mr Roesler's plans, a "stability committee" of independent experts could be created to make recommendations to improve competitiveness and check national budget plans and improve coordination.

The EU's original "stability and growth pact" set a ceiling on the deficit of 3 per cent of GDP which has been broken at some stage by most euro zone member states.