Sarkozy tries to reassures EU ministers

10th July 2007, Comments 0 comments

BRUSSELS, July 10, 2007 (AFP) - French President Nicolas Sarkozy sought Monday to reassure eurozone finance ministers about his budget plans with promises to shake up the French economy, but received a cautious reception.

BRUSSELS, July 10, 2007 (AFP) - French President Nicolas Sarkozy sought Monday to reassure eurozone finance ministers about his budget plans with promises to shake up the French economy, but received a cautious reception.

True to his image as a whirlwind of activity, the newly-elected rightwing leader tried to take Paris' eurozone partners by storm with the unusual move of inviting himself to the ministers' dinner meeting to outline his budget plans.

Although all 13-nations sharing the euro committed in April to balance their books by 2010, Sarkozy has warned since he was elected in May that France may need until 2012 so that he can jolt the French economy with a growth "shock".

"We're introducing unprecendented reforms," Sarkozy told journalists after meeting with the ministers in Brussels. 

"I'm not asking to put off the effort to consolidate our finances, I'm asking for an intelligent and dynamic use of the stability pact," he added referring to the European Union's fiscal rulebook.

The chairman of the meeting, Luxembourg Prime Minister Jean-Claude Juncker, focused on Sarkozy's commitment to reform, which he welcomed as "good news for Europe."

"We are happy to see France enter a phase of deep reform," said Juncker, who is also his country's finance minister. "It's good news for Europe. France will never again be a country of immobility."

EU Economic and Monetary Affairs Commissioner Joaquin Almunia, who has the job of policing public finances in the European Union, insisted that both strong growth and fiscal discipline were necessary.

"It is very important, it is crucial, that France has good economic growth and figures and it is also very important that there is budget discipline in France," Almunia said as he arrived.

In a similar vein, German Finance Minister Peer Steinbrueck, who has voiced reservations about the plans in the past, said: "The eurogroup (of finance ministers) said clearly that (budget) consolidation and reform go hand-in-hand."

Dutch Finance Minister Wouter Bos gave a cautious reaction to Sarkozy's reform plan, which he found to be lacking in details. "What made the discussion difficult is that he did not set out his programme. We'll have in a few months a more detailed programme."

Sarkozy's growth "shock" could cost 13 billion euros (18 billion dollars) and risks reversing the deficit's current downward trend just as other eurozone countries -- led by Germany -- are making big efforts to stamp out their deficits.

In addition to his plans to limit France's deficit cuts, Sarkozy has ruffled some feathers by pushing for a higher political profile for the eurozone.

Both initiatives could prove to be contentious, especially with Germany, which is making big efforts to balance its books and is suspicious of Sarkozy's drive for more "economic governance" for the eurozone.

In Frankfurt, Bundesbank president and ECB governing board member Juergen Stark also panned Sarkozy's proposals on economic governance, which he said would only lead to a confusion of responsibilities and duties."

Sarkozy acknowledged differences with European Central Bank chief Jean-Claude Trichet, whom he has frequently attacked for being overly focused on fighting inflation rather than creating growth and jobs.

"On monetary policy, I spoke briefly with Jean-Claude Trichet. We are not exactly on the same wave-length," Sarkozy said.


Copyright AFP

Subject: French news

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