PARIS, Oct 11: Top central bankers from France and Italy publicly challenged their governments’ budget policies on Friday, weighing into a raging controversy over the trade-off between steps to revive economic growth and reduce deficits.

Bank of France Governor Jean-Claude Trichet said there was no danger of economic recession in the world and urged France’s centre-right government to reduce the country’s public deficit faster than it plans.

Italian central bank governor Antonio Fazio said the budget bill hatched by Prime Minister Silvio Berlusconi’s government last week on the heels of the French one contained too many “one-off” boosters and not enough grassroots reforms.

Both men made their case at a time when national governments are torn between strategies to stimulate economic growth and the constraints of deficit control imposed under the terms of the European Union’s Stability and Growth Pact.

“The word recession is totally inappropriate,” Trichet, who is slated as next head of the independent European Central Bank, said. “We will see a re-acceleration during next year.

He issued a message to France’s centre-right government that was unusually frank by the normally cryptic standards of central bankers.

“I ardently hope we can reduce our structural deficit next year by 0.5 percent and that we can have a budget balance or surplus in 2006,” he said.—Reuters