ECB's Draghi says EU in 'crucial moment'

(ROME) - European Central Bank President Mario Draghi said Thursday that the EU was living "a crucial moment in its history," and stressed the importance of a growth pact to counterbalance budget discipline.

"The process of European integration needs a courageous jump in political imagination to survive," he said in a speech to hundreds of students at Rome's Sapienza University.

"Eurozone member governments must together and irreversibly define their vision of the economic and political construction which will sustain the single currency," he said.

The growth pact should be based on structural reforms such as an overhaul of labour markets, but also on boosting public investments by reinforcing the European Investment Bank and reprogramming EU structural funds.

Draghi said the crisis has revealed the EU's "weaknesses" and warned against increasing public deficits, saying that "there is no sustainable growth without ordered public accounts."

EU leaders met for an informal summit late Wednesday, but failed to make progress on how to tackle the questions hanging over Greece and its future in the eurozone, with deep fissures appearing in the France-German alliance.

Ahead of Draghi's arrival at the university in Rome, around 60 students protested against the austerity policy imposed on EU countries, holding up banners reading "No to the ECB! No to austerity!"

The ECB head was speaking as part of a homage to Federico Caffe, one of the biggest disciples of John Maynard Keynes, the British economist who recommended the US state finance large public works projects to boost the economy.