March 16 (Bloomberg) -- European Union leaders are considering increasing a 25 billion-euro ($32 billion) ceiling on EU aid to countries that are having trouble paying their bills, according to a draft statement prepared for a summit this week.

EU loans of 6.5 billion euros to Hungary and 3.1 billion euros to Latvia have partly depleted the pool of available aid. Romania last week said it is seeking help from the EU and the International Monetary Fund.

The 27-nation EU “should rapidly examine the possibility of increasing the ceiling for the union’s support facility for balance-of-payments assistance,” according to the draft document, which was obtained by Bloomberg News and will be debated by EU leaders at a March 19-20 summit in Brussels.

The EU statement, which is likely to be amended before it is published at the end of the summit, comes as the euro-area economy is set to contract for the first time this year. The ceiling for aid, which covers countries not using the euro, was raised to 25 billion euros from 12 billion euros in December.

A further boost would require unanimous agreement by the 27 EU leaders.

Under German pressure, EU governments on March 1 ruled out a broad-based bailout for ex-communist countries in eastern Europe and have balked at President Barack Obama’s pleas for more public spending to reverse the first global economic contraction since World War II.

‘Good Progress’

The document said the EU is making “good progress” toward pumping more than 400 billion euros, or around 3.3 percent of gross domestic product, into the economy to combat the recession. The leaders express “confidence in the medium- and long-term outlook of the EU economy,” according to the statement.

No new spending proposals are included in the document, which pledges to return to the balanced-budget policies that underlie the euro. While calling for a “swift and credible reversal of the fiscal expansion,” the statement sets no timetable. Germany has objected to the lack of a target date for countries to erase their deficits. A balanced-budget deadline, originally 2002, has been regularly rolled back since the common currency was introduced in 1999.

The EU will step up a push for stricter oversight of the global financial industry, with the draft statement calling for the Group of 20 to commit to regulation of hedge funds and credit-rating companies.

Banks should boost capital in good times to cushion against future losses, according to the document, backing a move planned by the central bankers and regulators who set global guidelines. Executive-pay policies should be subject to review by regulators to guard against incentives for “excessive risk-taking,” including “effective enforcement,” according to the statement.

Accounting Rules

Accounting rules should be made more flexible to “mitigate their pro-cyclical effects,” according to the draft. Opposed by some investors, such a move would be a victory for banks that blame the fair-value standard for worsening the crisis by forcing them to book paper losses and feeding panic selling of securities.

Countries should improve oversight of multinational banks by coordinating within regulatory “colleges” to be set up for all major financial companies by the end of this year, according to the document. The statement may signal delays in the program, compared with a March 31 deadline the G-20 set in November.

To contact the reporter on this story: James G. Neuger in Brussels at jneuger@bloomberg.net

Last Updated: March 16, 2009 12:02 EDT