BRUSSELS (MNI) - The President of the European Council, Belgian Herman Van Rompuy, wants to create an "economic government" of Europe to better enable the 27 EU members to coordinate their policies, French newspaper Le Monde reported, citing a document obtained on Monday by AFP.

The document will be discussed at a meeting of EU leaders in Brussels Thursday, Le Monde said.

Today, the Heads of State and Government of the European Union are each "responsible for economic strategy of their national government," the document said, Le Monde reported.

LONDON, Feb 9 (MNI) European credit markets have had a rather subdued session with prices trading not too far away from where they started the week. In the Eurozone peripheral spreads are mildly tighter, but have only retraced the small sell-off seen late yesterday. In the medium term spreads seem to be consolidating close to their widest levels of the year, with little sign of bargain hunting or short covering.

LONDON, Feb 9 (MNI) European credit markets have had a rather subdued session with prices trading not too far away from where they started the week. In the Eurozone peripheral spreads are mildly tighter, but have only retraced the small sell-off seen late yesterday. In the medium term spreads seem to be consolidating close to their widest levels of the year, with little sign of bargain hunting or short covering.

LONDON (MNI) - The three month euro LIBOR/OIS spread, having widened by just over 1 basis point Monday, reversed the move Tuesday, tightening by 1.35 basis points.

The tightening was driven by a 1.1 basis point increase in the OIS rate, with three month LIBOR declining by 0.25 basis point. The euro LIBOR/OIS spread has been volatile in recent days, with no clear underlying trend.

LONDON, Feb. 9 (MNI) - Speculation that ECB Trichet's early departure from a BIS meeting in Sydney was linked to plans for concrete action to sort out Greek debt concerns prompted strong euro-dollar demand in early Europe, the rate extending its recovery off Monday's late New York lows of $1.3644 to $1.3746.

However, late morning comments from an ECB spokesperson that early retrun was due to logistical reasons tempered the risk-on enthusiasm.

BRUSSELS (MNI) - Greece's problems would be worse without the euro, European Commission President Jose Barroso said on Tuesday, adding that the troubled southern European country, together with all the other 26 European Union countries must respect the bloc's budget rules.

Answering questions before members of European Parliament in Strasbourg, Barroso said that the euro zone was going through a difficult period, but that things would be worse without the single currency.

"The euro will continue to constitute a major tool for our development," Barroso said.

LONDON, Feb. 9 (MNI) - Sterling's early attempt to recover were thwarted as cable met decent resistance ahead of $1.5650, allowing euro-sterling to track euro-dollar's stronger recovery, the cross break above stg0.8800 seen adding to the pound's underlying negative tone. Data showing a wider-than-expected UK trade deficit also weighed.

LONDON, Feb. 9 (MNI) - Another rather lacklustre trading session for European credit markets so far today has resulted in a quiet morning for the new issues market with only a few new deals to add to the pipeline.

Rabobank is to issue a benchmark, 5 year fixed rate deal in Euros. Price talk is in the mid-market swaps plus 50 basis points area and the leads are BoA-ML, HSBC and UBS.

Terra Boligkredit is to issue a covered deal in Euros. The deal will be launched following investor presentations and the leads are Commerzbank, Danske Bank, UBS and UniCredit.