European Central Bank President Mario Draghi has said European stability can be achieved without resorting to the extremes of a euro zone breakup or the creation of a “United States of Europe”.

In an article for German newspaper Die Zeit, Mr Draghi has said the survival of the single currency is dependent on a higher level of joint decision-making but that does not require the immediate creation of a political union.

“Those who want to go back to the past misunderstand the significance of the euro,” he said.

“Those who claim only a full federation can be sustainable set the bar too high. What we need is a gradual and structured effort to complete EMU (Economic and Monetary Union).”

Mr Draghi said decades of European integration had already created a “significant degree of political union” and this would develop further as economic ties deepens.

He said true oversight over national budgets was a vital step towards this as “the consequences of misguided fiscal policies in a monetary union are too severe to remain self-policed.”

Mr Draghi said a strong economic union was essential to a single currency and the ECB would do everything in its powers to achieve this.

Sometimes this would sometimes require the bank going “beyond standard monetary policy tools” and employing “exceptional measures”, he said.