King posits new Stability and Growth Pact

Bank of England governor Mervyn King showed himself to be at odds with his ECB counterparts by suggesting to the UK Treasury Select Committee on Thursday that Europe's current rules to keep member states' fiscal policies in check are not sustainable.

King supported ECB president Wim Duisenberg's recent assertion of the importance of collective discipline among governments to keep fiscal policies under control. He emphasised that it is necessary to have "some" kind of pact, but implied that a