European Central Bank President Mr Wim Duisenberg has said the bank would not necessarily use the sanction of interest rates if a couple of countries failed to meet their budgetary obligations.
A recent French suggestion to postpone the date by which it balances its budget had produced more words than action, and Europe's stability pact, which commits EU members to erase government deficits by 2003/2004, had been very successful, he said.
"We would not take specific actions because one or two countries were not to fulfil their obligations. Specific actions we will only undertake from a euro area perspective," Mr Duisenberg told the European Parliament's Committee on Economic and Monetary Affairs at a hearing.
French President Mr Jacques Chirac recently sparked a fierce debate at the national and EU levels by proposing that European commitments to reach balanced budgets be pushed back to 2007.
Mr Chirac's spokesman later played down the remarks, saying France would meet its deficit commitments.
Dr Duisenberg said he was still confident finance ministers in the euro zone would live up to the commitments they made in the stability pact, but added that the ECB had not much more than moral persuasion to enforce the budget balancing rules.
"I have to remind you that the term ECB or central bank does not appear in the Stability and Growth Pact. We are not a part of it. So all we can do... is to open my big mouth," he said.
This process of peer pressure was tested earlier this year when the European Commission campaigned for an early warning to be issued to Germany and Portugal for soaring public deficits.