ECB head gives stark warning to EU states

EUROPEAN Central Bank President, Wim Duisenberg yesterday urged European Union finance ministers to stick to budget deficit rules, or risk a dangerous loss of confidence in monetary union.

Duisenberg’s farewell speech to finance ministers, delivered at a dinner in his honour in Venice on Wednesday, was one of his starkest warnings yet that the grand experiment of launching a new currency for Europe, is still a young project that could be undermined by fiscal laxity.

Governments must stick to the budget deficit pact to prevent this, Duisenberg said. “This is a contract not just among governments, but a contract with every single citizen of the euro area. It is on the basis of this contract that they have accepted loss of their monetary sovereignty,” Duisenberg said.