More than half of the European Union's member states - including France and Germany - are being threatened with legal action by Brussels because of their failure to implement anti-money laundering rules designed to clamp down on terrorist financing, writes Nikki Tait in Brussels.

Charlie McCreevy, internal market commissioner, has written to seven countries already, warning them that their failure to transpose the third anti-money laundering directive into their national laws leaves the European Commission with "no option but to proceed with legal actions". The letters sent out last week went to Latvia Belgium, Ireland, Slovakia, Sweden, Estonia and Malta.