Wednesday, July 25, 2007

Sarkozy and the ECB

. Wednesday, July 25, 2007

The new French president appears intent on gaining some influence over the European Central Bank. "Outlining for the first time the vision of the new French administration of how the euro area should operate, Jean-Pierre Jouyet, the country's minister for European Affairs, said that France would lobby for more regular - and more substantive - meetings between the euro group of finance ministers and the ECB president...

"We don't want to reform the treaty or touch the independence of the ECB," Jouyet said. "But when you're evaluating a country's economic situation you have to consider the whole picture: exchange rates, interest rates, public finances and growth. We want to talk about those factors. "It's the spirit of the treaty and the purpose of the euro group."

Unsurprisingly, the ECB is not enthusiastic. "A statement released by the ECB press department said that the ECB president "repeats with gravity" that any attempt to influence ECB decisions would violate European Union treaties."

While the French have subsequently backed away from the public effort to formally reduce ECB independence, they are maintaining their pressure for greater influence. One French official "cited an article of the EU treaty that established the bank "that nevertheless gives a very tiny bit of responsibility to the (EU) finance ministers on these subjects."

And while Sarkozy recognizes he holds a minority position among Euroland governments, he seems to believe that he has public opinion on his side.


Sarkozy and the ECB
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