Herman van Rompuy, the president of the European Council, said there must be “more convergence” between the economies of all EU members and not just those using the euro.
Even as Mr van Rompuy spoke in London, David Cameron was insisting that Britain’s position outside the euro meant it was not obliged to take part in any “harmonisation” of economic policies.
Mr van Rompuy last year drew up new plans for “economic governance” in the EU, rules to bring together economic policy amid the financial crisis.
His report set out plans for the European Union to carry out “surveillance” of member-states’ budgets and enforce sanctions on those who run up large deficits.
Mr van Rompuy yesterday said the sanctions regime would apply only to the euro countries. But the surveillance will be applied to all 27 EU members, he said.
“The proposals are proposals for the EU as a whole. Some chapters are not applicable to all countries -- for example sanctions, non-euro members are not concerned,” he said.
“But on stronger budgetary surveillance and macroeconomic surveillance, all are concerned. That is the main instrument of economic co-ordination and more convergence inside the union.”
Mr van Rumpoy added that the EU will “deepen” its common market with more reforms later this year.
Some EU leaders have said that all member-states should submit their annual budgets to Brussels before their national parliaments. Britain has refused to take part in such a system.
Mr van Rompuy’s comments came after he met Mr Cameron in Downing Street.
The Prime Minister also met Francois Fillon, the French premier, who has also spoken of the need for greater co-ordination of EU governments’ economic policies.
In a joint press conference with Mr Fillon, Mr Cameron insisted that Britain’s place outside the euro meant it was not a part of such moves.
“When we talk of harmonisation and these sorts of questions they don't have to apply to Britain because we are not in the euro,” he said, adding that Britain will not join the single currency under his leadership.
However, a strong eurozone is in Britain’s best interests, he said, conceding that some British public money could be used to bail out struggling economies like Portugual.
Britain is liable for up to £7 billion of a £51 billion crisis fund to help countries hit by the financial crisis, which was partly used to rescue Ireland last year. Labour is to blame for that, the Prime Minister said.
Mr Cameron said: “The last government signed up to a European financial mechanism before this government came into office, and it signed up to a mechanism which operates under qualified majority voting,” he said. “That mechanism still exists.”
A separate EU bailout fund, worth up to £365 billion, is funded only by euro countries. It would provide most of the money if, as economists expect, Portugal requires help financing its deficit in the coming weeks.