Peter Praet, a European Central Bank executive board member, yesterday warned against eurozone governments achieving fiscal consolidation predominantly through tax rate increases and cuts in government investment.

Relying on tax increases, Praet said, is only "exacerbating the burden on already compliant taxpayers", and has had "substantial negative effects" on disposable income and demand, as well as antagonising Europe's electorates. "Due protection of the most vulnerable is needed here," he