A senior European Union finance official insisted today the bloc's Stability and Growth Pact should be adhered to as growth would otherwise be undermined.
Mr Johnny Akerholm, chairman of the Economic and Financial Committee (EFC), said: "I am not so sure that the short-term idea about a flexible interpretation of the Stability Pact would really add to growth.
"Rather, [this interpretation] risks reducing confidence in the economy and risks reducing growth rather than adding to growth".
He added that governments often said they could not implement structural reforms measures in times of weak growth. "Times of slow growth would be the right time to implement measures we think are going to solve Europes's medium- and long-term problems," Mr Akerholm said.
He said it was not necessarily a lack of purchasing power that was leading to the weakness in private domestic demand in Europe but rather weak confidence.
The EFC prepares for EU finance ministers' meetings and is composed of two representatives from each of the EU states, one from the treasury and the other from the central bank, plus senior European Commission and European Central Bank officials.