The European Union approved Friday more "crisis distillation" of surplus wine, this time in Greece and Spain, to contain massive overproduction in Europe.

Specifically the EU's Wine Management Committee approved proposals to distill up to 300,000 hectolitres of quality wine in Spain, and for Greece up to 370,000 hectolitres of table wine and 130,000 hectolitres of quality wine.

"Once again we are spending large amounts of money on getting rid of surplus wine, when we should be spending it on improving our competitiveness," said EU Agriculture Commissioner Mariann Fischer Boel.

The European Commission on Thursday unveiled proposals for radical reform of Europe's wine industry, warning that that its traditional dominance is threatened by so-called New World wines.

The EU's executive arm called for over 10 percent of Europe's vines to be cut down over the next five years, while also urging simpler and more drinker-friendly labelling of wine.

The EU commissioner said the decisions on Greece and Spain were yet another wake-up call for the industry, which produces about 60 percent of the world's wine.

"Whats worse, both countries are distilling quality wine. This is exactly why we are calling for an urgent and profound reform of our wine market," she said.

At the start of June the EU commission approved crisis distillation -- under which wine is distilled, in part to make industrial ethanol, for some 5.6 million hectolitres of wine from France and Italy.

Under the emergency action, wine producers are paid 1.914 euros per hectolitre for table wine and 3.00 euros for quality wine, making a total cost to the EU budget of 22.2 million euros.