BRUSSELS, Dec 8 Reuters European Union finance ministers moved closer to an agreement on new EU fiscal rules early on Friday after eight straight hours of talks, but will need more time and possibly another meeting to reach a deal, two officials close to the talks said.

France and Germany still differ on how to sustain investment when the budget deficit is above EU limits, and other countries, roughly in two camps behind Paris and Berlin, are wrangling over issues including the minimum pace of annual debt reduction.

They39;ve concluded for tonight, one EU diplomat said. I understand there was good progress, but they need further consultations from a political and legal point of view.

A reform of the rules, which underpin the euro currency by setting limits on government debt at 60 of GDP and for deficits at 3, is necessary because a surge in public debt after the COVID19 pandemic made the existing framework unrealistic.

EU governments also have to find ways for the rules to allow for large public investment needed to fight climate change, a challenge the old system does not address.

The reform under discussion is to ease the current fiscal consolidation requirements by offering each country tailormade debt reduction paths over four to seven years along with incentives to invest.

France and Germany agree on 90 of the planned changes, finance ministers from both countries said on Thursday on entering the talks.

Other countries are working to resolve issues…