Trichet says Europe needs reforms

Trichet's comments at a meeting of central bankers in Beijing came amid speculation that the ECB could cut interest rates to soothe discontent in some countries over slow growth and European monetary union.

Although high oil prices and low consumer and business confidence were also holding back growth, economic reforms were the key, Trichet said.

"Reform is of the essence because we must elevate the growth potential of our vast economy of 307 million inhabitants, growth potential which is too low and which could be substantially, significantly augmented if we were to embark on reforms," Trichet said.

"The environment is obviously extremely favourable to growth and job creation because our short-term rates are at zero... and our long-term rates are at the lowest for a very long time, certainly since World War One."