Germany and France's leaders have put together a working document, called the Competitiveness Pact, to get all EU countries to agree to harmonised taxation and labour policies, including upping countries' retirement age to 67.
The leaders presented the plan to their counterparts at a summit in Brussels today which was originally intended to focus on energy and innovation policy.
European Commission sources, who wish to remain anonymous, said that early reactions from member states to the plans were less than favourable.
"There will be a massive pushback from most countries and the expectation of this succeeding is minimal," said the Commission sources.
Other measures included in the plan are salary indexation systems, debt limits or brakes written into countries' constitutions and mutual recognition of educational qualifications.
"What should be the goal of the economic cooperation? The goal should be to secure the well-being of citizens in our countries," German Chancellor Angela Merkel said at a press conference.
"We want to make the different European economies converge together [and] we are in agreement over a structural plan to bring an answer to the challenges Europe is facing," French President Nicolas Sarkozy insisted.
Speaking to journalists, a French official explained that, for the first time, Paris and Berlin were proposing to use Article 136 of the Lisbon Treaty, which allows eurozone countries "to strengthen the coordination and surveillance of their budgetary discipline" without the approval of other EU member states.
Exactly like Schengen agreement
A Commission source compared the pact to the Schengen agreement, which EU countries have progressively adopted since its inception.
But the official stressed that the Franco-German proposal was only the start of a discussion with other eurozone countries.
"Everything is still to be negotiated," he said, admitting that France had "divergences of views" with the European Commission, Germany and other member states on some points, but that these "should not be overstated".
"We want a stronger integration of European economic policy to achieve greater competitiveness. Together we will present our plan to the other heads of state and government during lunch."
Sarkozy said a meeting of eurozone heads of state would be convened before a regular EU summit at the end of March that is expected to see final decisions on reforming the single currency.