The president of the European Central Bank, Mario Draghi, said on Wednesday that countries in the euro zone should be compelled to take steps to improve the performance of their economies in the same way that they are already required to observe rules on government spending.
At a time when many voters and political leaders are complaining about what they see as the overbearing power of the European Union, Mr. Draghi called for more integration rather than less in a speech on Wednesday in London.
Countries that lag economically are a risk to their euro zone partners and should be required to change their policies, Mr. Draghi said.
“There is a case for some form of common governance over structural reforms,” Mr. Draghi said, according to a text of his remarks. “This is because the outcome of structural reforms — a continuously high level of productivity and competitiveness — is not merely in a country’s own interest. It is in the interest of the union as a whole.”
Mr. Draghi has frequently called for euro zone governments to take steps to improve growth, such as making it easier for companies to hire and fire workers, removing bureaucratic obstacles to starting a business, and rolling back regulations that limit competition.
But it was the first time that Mr. Draghi had proposed that such changes become an obligation for euro zone members. Countries in the currency union are supposed to observe rules on government budget deficits and total debt, though the rules have often been flouted.
Mr. Draghi’s call for a more tightly bound euro zone coincides with a debate in Britain, which is not a member of the currency bloc, about leaving the European Union. And Mr. Draghi’s comments follow significant gains made in May by anti-Europe parties in elections to the European Parliament.
As an example, Mr. Draghi noted that the World Economic Forum ranked Finland third in the world in terms of global competitiveness while Greece ranked 91st. “The persistence of such differences creates the risk of permanent imbalances,” Mr. Draghi said.
Perhaps wary of appearing to dictate government policy, Mr. Draghi did not say exactly how common rules would be created or enforced. But he alluded to a “supranational body” like the International Monetary Fund that would push for economic reforms.
Mr. Draghi also praised countries including Spain and Greece, which he said had increased exports as a result of steps taken to improve the business climate.
“So while lack of reform can threaten the cohesion of the union, we can already see how decisive reform can strengthen it,” Mr. Draghi said.
Benoît Coeuré, a member of the executive board of the central bank, delivered a similar message during a speech in Athens earlier on Wednesday. Eventually, Mr. Coeuré said, countries should transfer some responsibility over public spending to a European authority, part of what he referred to as a new social contract.
But Mr. Coeuré added that such a step would be possible only “after growth has resumed, unemployment and inequalities have receded, and economies have sufficiently converged.”