Assertive Sarkozy irks EU partners

16th September 2007, Comments 0 comments

16 September 2006, PORTO (AFP) - France faces thinly concealed and growing frustration from Paris' European partners, irked at President Nicolas Sarkozy's strident position towards EU spending limits and attacks on the ECB.

16 September 2006

PORTO (AFP) - France faces thinly concealed and growing frustration from Paris' European partners, irked at President Nicolas Sarkozy's strident position towards EU spending limits and attacks on the ECB.

Although Sarkozy vowed when he was elected in May to make France a reinvigorated force in Europe, it was left largely isolated at a Friday and Saturday meeting of EU finance ministers and central bankers in Porto, northern Portugal.

Eurozone finance ministers criticised France on Friday for not doing enough to rein in its public deficit after Sarkozy invited himself to one of their meetings in July to inform them he might miss a 2010 target to balance the budget.

Sarkozy responded to the criticism from Luxembourg Premier and Finance Minister Jean-Claude Juncker, who chaired the meeting, by taking a swipe at him in remarks published Saturday in newspaper Le Monde.

"What initiative has he taken?" Sarkozy asked, accusing him of not playing a big enough role on matters concerning the euro as chairman of eurozone finance ministers' meetings.

EU Economic and Monetary Affairs Commissioner Joaquin Almunia defended Juncker, saying: "It's not quantity, it's the quality of initiatives that counts."

In addition to the barb against Juncker, with whom Sarkozy had until then enjoyed cordial relations, the French leader also ruffled feathers with an attack on the European Central Bank's handling of recent financial market turmoil.

He accused the ECB of helping "speculators" and neglecting "entrepreneurs" by injecting billions of euros of liquidity into the banking system while not lowering interest rates after recent financial market turmoil.

In remarks quoted Saturday by the French daily Le Monde, Sarkozy said it was "strange to be injecting liquidity without lowering rates."

"They have facilitated things for speculators, while complicating them for entrepreneurs," he said.
 
A frequent target of Sarkozy's criticism, ECB president Jean-Claude Trichet batted aside his remarks and even suggested he was contradicting himself after having approved the central bank's September 6 decision to hold off on raising interest rates.

Sarkozy "seems to criticize the European Central Bank's actions ... even though the (French) president positively approved of it previously and even went so far as to attribute it to his influence," Trichet said.

The French head of state's attack against the ECB also added to growing tensions between Paris and Berlin, which considers the central bank's independence to be sacrosanct.

German Finance Minister Peer Steinbrueck rallied in support of the ECB, saying the central bank's reaction to the current turmoil on financial markets was "appropriate."

Steinbrueck said "the ECB's action was widely welcomed" by finance ministers at the meeting in Porto, and he "backed this positive assessment."
 
According to some media reports, Steinbrueck had a heated exchange during the French leader's unprecedented visit to eurozone finance ministers' meeting in July to discuss French finances with France's euro partners.

While Germany has worked hard to wipe out its deficit well ahead of a 2010 deadline for all eurozone members, Sarkozy has said the French deficit might be erased only in 2012 as he carries out pro-growth economic reforms.

Back in France, Sarkozy's comments also fuelled concern among political rivals about the impact they were having on relations with other European countries.

French centrist politician Francois Bayrou said: "I'm worried about the growing attacks that France is deploying against its European allies, against the Germans, the Luxembourgers, against all of the European countries."

AFP

Subject: German news

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