European Central Bank President Jean-Claude Trichet on Sunday raised concern about widening global imbalances after the financial crisis, calling them one of the main challenges for the global economy.
Global imbalances were blamed for contributing to and aggravating the financial crisis and recession that struck the global economy in 2008 and 2009.
A concern is that after some partial reduction induced by the crisis, global imbalances are starting to widen again, Trichet said according to a speech text for a ceremony, in which he was awarded the Global Economy Prize 2011 by the Institute for World Economy in the northern German city of Kiel.
Such imbalances raise challenges for international monetary and fiscal cooperation, Trichet said, referring to global imbalances as one of the main challenges facing the global economy and the world community.
Finance ministers of the world's major economies reached a fudged accord in February on how to measure such imbalances after China prevented the use of exchange rates and currency reserves as indicators.
The United States and other western countries accuse Beijing of keeping the yuan artificially undervalued to boost its exports, hence accumulating massive foreign currency reserves that they say distort the world economy.
Trichet said the euro zone does not contribute to global imbalances, pointing to projections by the International Monetary Fund which see the euro area current account broadly balanced this year and the next, up to 2015.
He pointed out that the euro area has a significant stake in effective global re-balancing, notably through sounder domestic policies worldwide which, in turn, would contribute to global external stability.
The euro zone is struggling with a severe debt crisis, facing its toughest test as it tries to prevent Greece defaulting.
The ECB is at odds with governments, including Germany, over a rescue package for Greece, and in particular over the terms of any moves to draw private sector lenders into the bailout operation.
Trichet criticized the currency bloc's policymaking process, saying governance was lacking.
Governance of the economic union is insufficient, he told an audience in the northern German city of Kiel after receiving the Global Economy Prize.
We are not responsible for governance in the economic union, he added, referring to the role played by the ECB. In this domain we act as an adviser.
We have very hard work today, and improving governance today is exactly what is being negotiated between the council, the ... parliament and the commission, Trichet said.
We are pushing this trialogue ... the lessons to be drawn from the present situation are pushing us in the direction of bold changes in governance, he said.
Trichet did not explain what these changes could be, saying it is work in progress.
(Reporting by Eva Kuehnen; Editing by David Hulmes)