In his farewell speech as ECB President, Mr Wim Duisenberg urged European Union finance ministers to stick to budget deficit rules or risk a dangerous loss of confidence in monetary union.
Mr Duisenberg's speech, delivered at a dinner in his honour in Venice last night, was one of his starkest warnings yet that monetary union is still a young project that could be undermined by fiscal laxity.
"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," Mr Duisenberg said.
He said the Stability and Growth Pact foresaw difficult economic times so there is no excuse for backsliding.
The EU, however, has decided to deal leniently with France which is set to breach the deficit limits for the third straight year citing slow growth, and Germany is heading in the same direction.
Mr Duisenberg had harsh words for finance ministers."You were warned. The rules were not designed just for the good times but also for the bad. The difficulties that some of you now face do not provide grounds for tinkering with the rules. They call for implementation," he said.
Mr Duisenberg, who hands over to Bank of France Governor Jean-Claude Trichet, rebuffed criticism that the ECB should do more to boost growth.
For the ECB's part, its mandate is to achieve an environment of stable prices, which in turn fosters sustainable growth. Mr Duisenberg said the ECB has achieved this objective.
"Most importantly, we have done our duty. We have maintained price stability. And we have done it in a pragmatic fashion with a steady hand," he said.
Those who feared that the ECB - to gain credibility as an anti-inflation fighter - would raise interest rates unnecessarily were proven wrong, he said.
"We held our nerve. Even in its infancy, the ECB showed itself to be a mature central bank. I am proud to have been its president these past five years," said Mr Duisenberg.