Parliaments need say in EU integration - French PM

NANTES, France, June 17 (Reuters) - National parliaments should provide democratic oversight if Europe adopts more integrated economic governance, France's prime minister said on Sunday, warning that the European Central Bank should not dictate countries' policies.

"If we are going to work more closely together on what is called economic governance, there also has to be democratic control, which in my view cannot be confined to the European Parliament alone," Jean-Marc Ayrault said.

"There has to be a role for national parliaments: Europe remains and will remain a federation of nation states."

Greater economic integration is one of the issues being debated by European leaders as they seek a way out of a deepening debt crisis.

President Francois Hollande, France's first Socialist leader in 17 years, is demanding that Europe complement a budget discipline pact agreed this year with a growth pact, creating tensions with Germany ahead of a crucial end-June summit.

Leading ECB policymakers, including ECB President Mario Draghi, have rebuffed calls from European leaders including Hollande for further monetary easing and instead told governments to press ahead with structural reforms and to tame their deficits.

In a future economic union, "it is not the ECB that is going to dictate policies to governments", Ayrault told reporters after voting in the second round of France's parliamentary election in the western city of Nantes.

Hollande has called for 120 billion euros in short-term growth measures while offering to pursue so-called euro bonds - vigorously opposed by Germany - in the longer term, according to proposals submitted to EU partners and cited by the French newspaper Le Journal Du Dimanche.

The French presidency said Hollande and German Chancellor Angela Merkel had a "constructive" telephone discussion on Saturday regarding the euro zone's debt crisis and Sunday's election in Greece, which could determine the country's future in the euro zone.

Ayrault said Merkel had made proposals that went in the right direction for the medium term, but that Europe also needed to tackle immediate problems.

"If we just project ourselves into the future and don't deal with urgent matters such as how to emerge from the domination of financial markets or revive growth, the step of relaunching the European project will be undermined," he said.

The French Socialists are expected to secure a majority in parliament at a run-off election on Sunday, just over a month after Hollande won a presidential ballot against conservative Nicolas Sarkozy. (Reporting by Guillaume Frouin; Writing by Gus Trompiz; Editing by Kevin Liffey)