LONDON - EUROPEAN Central Bank President Jean-Claude Trichet warned European nations in a newspaper interview on Monday not to rip up the rule books when launching emergency packages to save their economies.

While refusing to comment on any specific country's policies, he told the Financial Times that fiscal indiscipline could threaten already fragile economic confidence and increase nervousness about governments' funding needs.

'We would destroy confidence if we blew up the stability and growth pact', which sets rules on public deficits and debt, he said.

The pact offers flexibility to countries with stronger finances, but he warned: 'The market is aware of the room for manoeuvre of the various countries.'

Mr Trichet argued that the global financial crisis had posed a serious threat to industrialised economies, saying: 'We cannot afford to put in the future the concept of the market economy at risk as we did.'

He said: 'The fragility, not only of global finance but of the global economy itself, is something that we should reflect on.' -- AFP