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ECB's Draghi: undermining EU budget rules carries high price for all

FILE PHOTO: European Central Bank (ECB) President Mario Draghi testifies before the European Parliament's Economic and Monetary Affairs Committee in Brussels, Belgium July 9, 2018. REUTERS/Francois Lenoir/File Photo

BRUSSELS (Reuters) - There is no evidence that undermining the European Union's budget limits on borrowing leads to prosperity, but it is clear that such actions are costly for all in the single currency area, the head of the European Central Bank said on Thursday.

Speaking to European Union leaders at a summit devoted to euro zone integration, Mario Draghi said EU budget rules, the Stability and Growth Pact, had to be respected in the interest of all, one official with insight into the summit said.

While not naming Italy directly, it was clear that Draghi was referring to Rome's plans to raise borrowing in order to finance election promises of higher spending and tax cuts.

(Reporting By Jan Strupczewski; Editing by Andrew Heavens)