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The currency bloc needed a strong authority to enforce a reduction of debt levels, Knot, who also heads the Dutch central bank, said. His downbeat assessment of how long it might be before states again met the standards on debt they had to adhere to when they joined the single currency added to a growing debate about whether those at the sharp end of the debt crisis should be allowed to scale back their austerity programmes.
Knot also said eurozone states' rising debt levels, trade deficits and falling competitiveness had all contributed to the crisis, and EU thresholds on those and other imbalances needed to be enforced more rigorously. Dutch Prime Minister Mark Rutte will argue for a strong enforcement of the EU debt ratio rule at this week's summit, he told parliament last week.
Knot said European policymakers and central bankers were doing their best to solve the debt crisis.