European Central Bank President Jean-Claude Trichet says euro zone governments need to make their deficit targets for next year credible. But he also pointed out that the euro zone's budgetary gap would be lower next year than in the United States or Japan.
Mr Trichet also told journalists at the European American Press Club in Paris that emerging economies with large surpluses should progressively make their currencies more flexible.
He added that there was no 'currency war' in reality and that the idea did not reflect central banks' thinking.
Earlier, the ECB chief told French radio he did not think that austerity measures in euro countries would drive them into recession.
Meanwhile, bond market traders said the ECB was back in the markets today, having bought Portuguese and Irish bonds yesterday. This brought down yields - the interest rates demanded by investors - on 10-year Irish bonds to just over 8.4% this evening, while Portuguese yields fell to 6.06%.
