Trichet calls for tougher eurozone budget rules

The eurozone needs even tougher budgetary rules than those already proposed by the European Commission, according to the head of the European Central Bank.

Jean-Claude Trichet, speaking at the World Policy Conference in Marrakech at the weekend, argued that the new rules suggested by the EC – which include provisions to impose sanctions at an earlier stage against those that breach agreed borrowing levels – do not go far enough if crises, similar to that seen in Greece earlier this year, are to be prevented in future.

"A number of the Commission's proposals are going in the right direction, but for the euro area, more ambitious reforms are needed to ensure the smooth functioning of monetary union," Mr Trichet said. "All deadlines under the excessive deficit procedure should be significantly reduced and sanctions should be applied quasi-automatically."

Mr Trichet's comments came ahead of today's meeting of EU finance ministers in Luxembourg.