The European Central Bank (ECB) has backed the Taoiseach's call for EU leaders to use this month's summit in Brussels to accelerate the pace of economic reform in Europe.
The ECB president, Mr Jean-Claude Trichet, said that further reforms in financial, product and labour markets would boost economic growth and create jobs.
"We welcome that the forthcoming spring meeting of the European Council is set to give renewed impetus to the Lisbon agenda, speed up the pace of reforms, and strengthen the effectiveness of the decision-making process. Structural reforms will have enormous benefits for the citizens of the euro area. These reforms are crucial for sustained non-inflationary growth and employment, and they are therefore also important for maintaining social cohesion in the long run," he said.
Mr Trichet was speaking in Frankfurt after a meeting of the ECB's governing council left interest rates unchanged at 2 per cent. Mr Trichet gave no sign that any change in interest rates was imminent, predicting that inflation would remain low well into 2005.
Some European politicians and business leaders have called for a cut in rates to help manufacturers, many of whom have suffered because of the euro's rise on currency markets.
"I hear, I listen, but I know that the treaty tells us we have to take our decision in full independence. We should not be influenced in either direction. It is not that easy, frankly speaking," he said.
The German chancellor, Mr Gerhard Schröder, who had called for an interest rate cut, said after the ECB's decision that he remained convinced of the need for lower interest rates.
"I have to respect the decision - and I do - but I have not changed my opinion," he said.
Mr Trichet repeated his call to European consumers to spend more, describing a renewal of consumer confidence as "very important" for the EU's economic recovery.
"It is not liquidity that is lacking in Europe today. It is not capital that is lacking. It is not savings that are lacking. It is certainly not men and women of great quality who are lacking. It is, a little bit, confidence," he said.
Mr Trichet made no comment on recent exchange rate developments but suggested that a joint statement by the ECB, the European Commission and euro-zone finance ministers had helped to halt the euro's rise against the dollar.
The ECB president said that, although the recovery in the euro zone had been weak so far, economic growth was likely to pick up as 2004 progressed.
"There are also reasons to expect a gradual increase in consumption growth during this year, following the subdued developments of last year. In the short term, growth in real disposable income is supported by lower import prices and tax cuts, while later on the gradual improvement in labour market conditions should become an additional factor supporting income growth and confidence.
"The financial situation of households in the euro area is sound, not least in comparison with a number of other industrial economies, and there is no financial impediment to a pick-up in private consumption," he said.
