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Voting rights at risk -- Trichet

EUROPEAN Central Bank President Jean-Claude Trichet said deficit offenders in the EU could have their voting rights withdrawn.

Governments in breach of fiscal rules could face tougher punishment.

Trichet slammed past failures as "a disgrace".

"A wider spectrum of financial sanctions needs to be considered, along with non-financial and procedural sanctions, such as more stringent reporting requirements or even a limitation or suspension of voting rights," Trichet said.

He also said that governments could consider changing the euro's founding treaty.

The last revision to the EU's treaties, signed in Lisbon, took eight years to negotiate and ratify.

However, he acknowledged the impossibility of transferring full budgetary responsibility to any centralised institution, and repeated that the ECB is opposed to any system that open-endedly transfers liabilities from one state to another through the issue of bonds under a "joint and several" guarantee.

EU officials are devising new fiscal rules to prevent a repeat of the European sovereign debt crisis, which was sparked when Greece's budget spiralled out of control and forced it to seek an EU-led bailout.

Mr Trichet told European lawmakers that all had to accept that the spirit and letter of the EU's Stability and Growth Pact aimed at maintaining fiscal discipline had not been fully respected.

"We considered it was a disgrace," Trichet said.


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