Jean-Claude Trichet, the president of the European Central Bank (ECB), has stated that other territories should follow Europe's lead in raising taxes and cutting public spending.
He told the Financial Times that politicians who want to prolong economic stimulus are mistaken in their belief that stopping doing so will seriously harm their country's prospects for growth.
"With the benefit of hindsight, we see how unfortunate was the oversimplified message of fiscal stimulus given to all industrial economies under the motto: 'stimulate, activate, spend'," he suggested.
The ECB chief said that it is now important to strike a balance between bold loosening policies and "unduly hesitant retrenchment".
Earlier this month, Mr Trichet said that the austerity drives and deficit cuts being undertaken by many European governments are helping to restore economic confidence in the eurozone.
He added the publication of the results of stress tests conducted on banks in the region will also be helpful in gaining the trust of the markets, reported Reuters.
By Asim Shah