Prime Minister Silvio Berlusconi escaped Monday a European Union warning over Italy's finances after stepping into the breach at EU talks following the shock departure of his finance minister.

Berlusconi, whose administration was left reeling by the weekend resignation of economy minister Giulio Tremonti, won over his partners by promising tough measures to get his government's deficit in line with EU rules.

Berlusconi's personal appearance at the meeting of EU finance ministers in place of the fallen Tremonti was a sign of his commitment, Dutch Finance Minister Gerrit Zalm said.

"At least he has the advantage that he won't be squabbling with his prime minister," he quipped.

The decision was a reverse for the European Commission, which wanted Italy to be given an "early warning" over its deficit before it breaches a limit set out in the EU's Stability and Growth Pact this year.

On the other hand, the ministers upheld the commission's recommendation that Greece be given four months to outline how it will redress its own deficit.

Ministers also launched an "excessive deficit procedure" against six new EU members -- Cyprus, the Czech Republic, Hungary, Malta, Poland and Slovakia.

To the commission's anger, France and Germany have already been allowed to breach the deficit limit -- 3.0 percent of gross domestic product (GDP) -- without any punishment from their EU peers.

Zalm, whose country holds the EU's rotating presidency for the next six months, said Berlusconi had pledged tough budget cuts of 7.5 billion euros to avert the EU warning.

But judging by Tremonti's fate, Berlusconi could have his work cut out in pushing through the measures as promised within the next 10 days.

Partly because of the planned spending cuts and partly because of a power struggle within Berlusconi's four-party coalition, Tremonti was forced out on Friday.

The finance ministers' decision will give the Italian leader some breathing space to implement the measures without the threat of EU sanctions.

"It's a good result, as I had predicted, and in consequence we will continue to put in train measures for 2004, and will hold a debate on measures for 2005," Berlusconi said.

But the decision will do nothing for the credibility of the stability pact, after the ministers decided last November to suspend punishment against France and Germany despite their serial breaches of the deficit limit.

That row will come to a head on July 13 when the European Court of Justice rules on a request by the commission to have the ministers' decision declared illegal under EU law.

In any case, the commission said it was planning to unveil reforms in early September designed to make implementation of the pact more flexible.

The EU ministers also debated the appointment of an elected "president" for the monthly meetings of the eurozone countries.

Sources said that Luxembourg Prime Minister Jean-Claude Juncker emerged Monday as the likely first "Mr Euro", to serve for two-and-a-half years as the political figurehead of the euro area.

The post is foreseen in the EU's first constitution, but several governments would like to see it created earlier.

And in the meantime, Berlusconi is under pressure to find a successor to Tremonti. Italian press speculation has centred on the EU's widely respected competition commissioner, Mario Monti.

Berlusconi was tight-lipped on the speculation, but said: "It's clear that it is important that someone be installed at the treasury ministry who can, within a short time, advance the programmes that have been suspended."