The European Union plans to set up a central online security operation where member states would be obliged to aid each other in the apprehension of cyber criminals.
It is hoped that through co-operation the EU will be able counteract cyber crime in a more fast and efficient manner than has previously been possible.
Under the directive convicted hackers would face harsher punishments throughout the member states, with maximum sentences of five years.
For inclusion, member states must agree to criminalise the “the production, sale, procurement, import, possession or distribution" of tools or software used for malicious purposes online.
The British government views online crime as a future tool of organised crime and warfare and has devoted £650 million to tackling the threat.