British PM stung by French president's barbs

9th February 2009, Comments 0 comments

In a TV interview on Thursday, Sarkozy said Britain’s controversial cut in VAT will not help improve the economic situation in the UK.

LONDON – British Prime Minister Gordon Brown's spokesman sought Friday to downplay criticism by French President Nicolas Sarkozy, but failed to disguise clear irritation at the remarks by a key ally.

The spokesman said Sarkozy's remarks, in a television interview Thursday, had to be understood in the context of French domestic politics.

The barbed exchanges run counter to a recent warming of relations between the two leaders, who amid the global downturn have at times appeared closer than France and its traditional European heavyweight partner Germany.

Sarkozy notably dismissed a controversial cut in value added tax (VAT) in Britain as having "made absolutely no difference," adding "consumption in England has not only not recovered, it has continued to shrink."

He added that London's City financial district "is plugged in to the United States... but frankly when you see the situation in the United States and the United Kingdom, we don't want to look like them."

Brown's spokesman told reporters, with a clear hint of irritation, that Sarkozy's Elysee Palace office had "been in contact this morning to assure us that these remarks were not meant as a critique of UK economic policy - which is nice.

"It is important to remember the context in which he was making the comments, which as I understand it, was a domestic debate on television about the way forward for the French economy and French proposals for an economic stimulus," he told reporters.

"I think it is important to keep seeing it in that context."

The spokesman said it was too early to judge the impact of the VAT cut, which was implemented in December.

"We have set out quite clearly the case for the VAT cut and all along we have said that other countries must take what measures are appropriate for their own economic circumstances, but the important thing is that we coordinate our response," he said.

Business and enterprise minister Pat McFadden also rebuffed Sarkozy's VAT comments. "I don't believe that the VAT cut hasn't worked. This is something that is going to be in place for the rest of the year," he told BBC radio.

"I don't deny for a moment that times are tough in the economy but I think that governments do have to be active. Many governments around the world are taking a fiscal stimulus."

The French president also highlighted the differences between the French and the British economies, saying Brown's strategy was designed for a country which had turned its back on its industrial heritage.

"The English have done that because they no longer have any industry, in contrast to France. Because 25 years ago, England chose services and in particular financial services," he said.

"Gordon Brown can't do what I'm doing with car manufacturers, the timber industry, or what we are going to do with building some other industries - because they don't have any anymore.

Sarkozy's remarks are not the first time in recent months a European leader has criticised Brown's economic policy, which the British leader has repeatedly trumpeted as a direction which other countries are following.

Late last year, in an interview with Newsweek magazine, German Finance Minister Peer Steinbrueck called London's large-scale borrowing "breathtaking" and "crass Keynesianism".

At the time, the row was downplayed with Brown blaming the comment on "internal politics" as Steinbrueck and German Chancellor Angela Merkel are from different parties.

[AFP / Expatica]

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