The high-level group on media freedom and pluralism set up more than a year ago by Neelie Kroes, the European Commission vice-president, concluded that it was essential to introduce new rules to ensure journalists and media organisations act responsibly and do not abuse their power.
New recommendations would see each national media council come under the control of the EU's executive.
And independent agencies with sweeping powers to investigate complaints and enforce fines could be rolled out if the recommendations of the Brussels-appointed panel become law.
"All EU countries should have independent media councils with a politically and culturally balanced and socially diverse membership," says a report by the group, chaired by Vaira Vike-Freiberga, Latvia's former president.
"Such bodies would have competences to investigate complaints [and] should have real enforcement powers, such as the imposition of fines, orders for printed or broadcast apologies, or removal of journalistic status." Ms Kroes said she welcomed the recommendations and that the European Commission would take some time to digest the suggestions.