The President of the European Central Bank, Jean-Claude Trichet, has poured cold water on suggestions from some member states - notably Germany - that certain types of spending should be excluded when Brussels calculates deficits.
German finance minister Hans Eichel complained recently that it was "unfair" that countries paying more money into EU coffers than they receive should then be punished for exceeding the EU's budgetary threshold of three percent of gross domestic product (GDP).
"In the 3.5 percent German public deficit, 0.5 percent is linked to its net contribution to the EU budget", said Mr Eichel.
But, speaking in the European Parliament, Mr Trichet said, "we do not see how we could maintain the credibility of the Stability and Growth Pact if we eliminate certain types of spending ... those public spendings are public spendings ... this is the unanimous sentiment of the ECB".
He added, "to my knowledge, quite a large number of governments are very much against this proposal".
Joint diagnosis
But if Mr Trichet was at odds with Germany on this issue, he expressed strong agreement with the US after reports of disagreements between the two over currency volatility.
Some EU policymakers have blamed the US - and particularly the high level of American deficits - for the weakness of the dollar against the Euro, which harms European exports and has a dampening effect on growth.
But Mr Trichet was firm in emphasising, "we have a joint diagnosis on policies".
He added, "I trust our American friends on the lucidity of their diagnosis and I trust them on their will to correct their weak points ... I'm sure that Europe is taking seriously its weak points".
The Frenchman said that euro zone growth would be around two percent next year and predicted that growth would be "somewhat slower" than expected.
The euro shot to new record highs against the dollar of 1.33 dollars on the back of Mr Trichet's remarks.
By: N. Peter Kramer
