Almunia also warned against disorderly movements in currency markets and said it was important not to increase foreign exchange volatility given the existing turmoil in financial markets.

‘It’s not easy to reach a new consensus. I think we need one but it’s not easy. In the consensus we need to have the non-European partners of course. We need the consensus of the Americans, the Japanese, the Canadians,’ he said.

‘But I would really at least like to have a serious, reasoned, solid, credible consensus among the Europeans of the G7. Those are the British...Germany, France and Italy, and there is also the ECB and the president of the Eurogroup.’

Almunia called for discipline among European officials when talking about exchange rates and said it was important to reach agreement in Europe on a common line.

‘I would like to have, before the next meeting of the G7, the next one is in February, a single European voice, and one euro zone voice,’ he said.

‘I think that Mr (ECB President Jean-Claude) Trichet has all the reason in the world to ask government officials for discipline when we’re talking in public about exchange rates.’

Almunia also said it was important for China to move to a flexible exchange rate.

‘China should speed up the introduction of a more flexible exchange rate regime,’ he said.

But he said any moves that could lead to increased volatility in exchange rate markets at the moment should be avoided.

‘We must ask for all the economic players to be careful because we need to avoid exchange rate volatility,’ he said.

‘It is harmful for everybody.’

Almunia said ‘it is no secret’ that the dollar needed an adjustment but there were limits to how far it could move.

‘The dollar is in the process of losing value. That helps adjust the American deficits,’ he said.

‘But the Americans are completely aware that it has its limits,’ he said.