* EU leaders seek more efforts by task force on reforms
* Risks remains to economic recovery, tough sanctions sought
* Leaders work on strategy to enhance EU's global standing
By Timothy Heritage
BRUSSELS, Sept 15 (Reuters) - European Union leaders will call on Thursday for more efforts to ensure Europe does not sink into a new financial crisis and consider calls for tougher sanctions on countries that miss debt and deficit targets.
The leaders of the 27-country bloc, meeting in Brussels, will also discuss relations with big trade and political partners such as China and the United States to start drawing up a strategy to enhance the EU's standing on the world stage.
EU leaders say the economic recovery is gathering pace in Europe after the global financial crisis, and the bloc almost doubled its economic growth forecasts for 2010 this week, but plenty of risks remain to the economy.
"We won the battle on the euro. Problems are not over but we are in a much better shape than before the summer," EU President Herman Van Rompuy said in a video message, referring to the debt crisis that began in Greece and threatened the euro's future.
Van Rompuy said in a letter to EU leaders that he would deliver a progress report at the summit on the work done by a task force set up to improve economic policy coordination and protect against any repeat of this year's sovereign debt crisis.
"Important progress has been achieved ... more work is however required," he said.
In one of its most ambitious financial reforms since the economic crisis, the EU's executive unveiled proposals on Wednesday to curb or temporarily ban short selling and tighten controls on derivatives.
Short selling tactics and derivates trading have been blamed for exacerbating market volatility during the financial crisis and the proposals advocate handing significant powers to a new markets watchdog.
A draft statement prepared for Thursday's summit showed the leaders would underline the need to keep up momentum on the reforms which the economic task force, headed by Van Rompuy, is expected to outline at an EU summit in October.
EU finance ministers have agreed to submit budget plans for early review by the executive European Commission and other EU governments as part of moves to tighten fiscal discipline, but frustration is growing with the lack of progress in other areas.
LACK OF PROGRESS
Pressure is growing on the task force, which groups the EU member states' finance ministers, to put more emphasis on controlling debt levels. Most of the 16 countries that use the euro have debts above the limit of 60 percent of gross domestic product that is allowed under the EU's budget rules.
There has been little progress on making sanctions for breaching the rules all but automatic, and no clear response to calls for earlier penalties to ensure budgets are in balance or surplus and do not exceed a deficit of 3 percent of GDP.
"On sanctions, some work needs to be done in the task force to determine what the likely point of equilibrium might be," an EU official said, underlining the problems securing agreement on how to tighten punishment procedures for budget sinners.
Dominique Strauss-Kahn, head of the International Monetary Fund on Tuesday called for "bold action" by European leaders to reform EU budget rules, warning that without changes the bloc risks losing competitiveness.
The European Commission said this week the euro zone economy would grow by 1.7 percent this year, rather than the 0.9 percent it forecast in May, and the EU economy as a whole would grow by 1.8 percent, compared to the 1.0 percent estimated in May.
But EU leaders are still urging caution because of high debt levels and tensions in sovereign debt markets. Strauss-Kahn has said a mood of uncertainty hung over the European economy.
A senior EU envoy said privately this week the economic situation was still "very precarious", and governments across Europe face public pressure over austerity plans and reforms.
EU leaders have given no indication that Japan's market intervention on Wednesday to curb the yen would be discussed on Thursday. The European Commission, the EU's executive arm, however said after the move that coordinated action would have been more effective.
The summit will also be attended by EU foreign ministers who will take part in a debate on how to improve the EU's global standing, which is widely thought to have been diminished in the last few years.
"We are punching now below our weight of 500 million people and 22 percent of world GDP," Van Rompuy said. "Europe must act as a strong global actor on the international scene."
He said he did not expect any immediate decisions to be taken on the EU's relations with its main partners, and how to tackle multilateral meetings of the Group of 20 economic powers.
Europe is also facing pressure to give up some seats on the IMF's 24-member board to emerging market countries.
Germany said on Wednesday that EU countries were ready to review the distribution of power on the board. (Additional reporting by David Brunnstrom; Editing by Susan Fenton)