EU-Britain spat 'sad': ECB chief

19th December 2011, Comments 0 comments

European Central Bank chief Mario Draghi said he was saddened by the increasingly bitter spat between Britain and the rest of the European Union over London's refusal to join a fiscal package to solve the bloc's debt crisis.

"Britain certainly has shown a capacity to undertake a fiscal correction of an extraordinary size. My more general reaction to all this is that it's sad. I think the UK needs Europe and Europe needs the UK," Draghi said in an interview to be published in Monday's Financial Times.

Britain rocked the EU earlier this month when Prime Minister David Cameron vetoed a proposed treaty on measures intended to boost integration and save the beleaguered euro. The other 26 EU nations agreed to press ahead with an inter-governmental pact instead.

Cameron has said that proposed new regulations governing financial services were not in the British national interest.

Draghi told the London-based broadsheet that recovery depended upon rebuilding the trust of European investors and citizens, and that a strong ECB was central to that plan.

A cross-Channel row erupted last week after Britain clashed with France at a dramatic summit over Cameron's refusal to join members of the eurozone currency bloc in the new fiscal pact.

That prompted French President Nicolas Sarkozy to declare there were now "two Europes".

France was also angered by a warning from US credit ratings agency Standard and Poor's that it could strip France of its triple-A rating as a result of the crisis.

In response, Christian Noyer, the governor of the French central bank, suggested on Thursday that the ratings agencies should consider downgrading Britain instead, before French Prime Minister Francois Fillon added to the criticism of the British economy.

Britain hit back Friday as deputy premier Nick Clegg told Fillon to "calm the rhetoric" and that the comments were "simply unacceptable".

© 2011 AFP

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