ECB chief has 'objections' to euro rules proposal

21st October 2010, Comments 0 comments

European Central Bank President Jean-Claude Trichet has made clear his "objections" to a European Union deal on reforming the eurozone, a bank spokesman told AFP on Thursday.

"I can just confirm Trichet made objections against the agreement. He made a note describing his objections to the agreement," the spokesman said, confirming an earlier story in the Financial Times.

On Monday, European Union finance ministers thrashed out a controversial compromise deal that would put in place tougher penalties for countries that fail to comply with the bloc's fiscal rules.

Under the agreement, a country warned by the European Commission on its budgetary practices would have six months to amend its behavior before sanctions would take effect.

Germany initially wanted such penalties to be automatic, but Chancellor Angela Merkel dropped this demand in the teeth of French pressure, prompting some in Berlin to accuse her of buckling under fire from Paris.

The EU's president, Herman Van Rompuy, said the planned changes amounted to the eurozone's "biggest reform" since its creation in 1999.

The new measures are for the moment aimed only at the 16 countries that use the euro and will be picked over by national leaders at a summit on October 28-29.

© 2010 AFP

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