Wednesday

20th Jan 2021

Sarkozy wants new role for euro bank

  • Sarkozy is trailing Hollande in polls (Photo: elysee.fr)

With just a week to go until the presidential elections, French incumbent Nicolas Sarkozy on Sunday (15 April) said the European Central Bank should get a new mandate on reviving economic growth - a no-go area for Germany.

“On the question of the ECB’s role in boosting growth, we French are going to open the debate,” Sarkozy told supporters in central Paris during the biggest rally of his re-election campaign to date.

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

He said that there must be "no taboos" in discussing the rules of the eurozone, including a more growth-oriented role for the ECB: "We cannot have taboo subjects. We cannot have banned debates.”

The Frankfurt-based ECB was a political target for Sarkozy five years ago during the 2007 presidential election campaign. Since then he has regularly spoken out in favour of a more active role by the bank in saving ailing governments in the eurozone.

This put him on collision course with German Chancellor Angela Merkel for whom the independence of the bank is sacred.

In November last year as Italy and Spain's borrowing costs rose to bail-out territory, Sarkozy and Merkel, as well as Italy's Mario Monti, agreed not to publicly discuss the ECB's role to avoid the impression that the bank is subject to political influence.

The bank soon rolled out the first half of a €1 trillion worth of cheap loans to banks, which in turn bought up Spanish and Italian bonds and drove the costs down.

But Spain's borrowing costs have started to rise again in recent weeks, despite the second half of cheap loans injected in the banking system.

Sarkozy has other concerns however. He is trailing behind Socialist challenger Francois Hollande, who is advocating pro-growth policies and wants to adjust a Germany-driven fiscal discipline treaty.

According to a TNS Sofres survey published on 13 April, Hollande would win 56 percent of the vote in the run-off scheduled for 6 May.

"Europe must cut its debts, it has no choice," Sarkozy said in Paris on Sunday. "But between deflation and growth, it has no choice either. If it chooses deflation, it will disappear."

He also hinted at some adjustments to the eurozone debt and deficit rules, as the crisis has "shown the limits" of these rules - similar territory to the Hollande camp.

Meanwhile, the Socialists contender urged supporters at a rival event to "resist euphoria" and "get out and vote."

ECB staff worried about inflation

With inflation expected to stay above two percent this year, the ECB's own staff is now reportedly worried about having no protection against a slide in the value of the euro, partly caused by the institution they are working for.

"Unfortunately the pensions of ECB staff are not protected against inflation," Carlos Bowles, a spokesman for the ECB staff told Frankfurter Allgemeine Sonntagszeitung. He added that there is a legal case at the European Court of Justice against the ECB on the matter.

But if it were to agree to an inflation-linked adjustment to pensions, the ECB would be admitting it that it could fail in its core task: protecting the eurozone against inflation.

Germany defends ECB from Sarkozy proposal

Merkel has rejected Sarkozy's idea of changing the euro bank's mandate if he gets re-elected. Denmark has also urged leaders to "stop talking" about the ECB.

Vietnam jails journalist critical of EU trade deal

A journalist who had demanded the EU postpone its trade deal with Vietnam until human rights improved has been sentenced to 15 years in jail. The EU Commission says it first needs to conduct a detailed analysis before responding.

News in Brief

  1. Brexit prompted finance exodus from UK to France
  2. Italian PM Conte wins confidence vote in Senate
  3. Borrell washes hands of EU's Venezuela policy
  4. Russia backs Greece in eastern Mediterranean dispute
  5. 'Ski-holiday' Switzerland reaches new infection high
  6. Germany extends lockdown, others expected to follow
  7. Barnier to be Brexit special adviser to von der Leyen
  8. EU commisioner to visit Bosnia's Lipa migrant camp

Budget deal struck, with Hungary threat still hanging

Ultimately, the European Parliament managed to squeeze an extra €16bn in total - which will be financed with competition fines the EU Commission hands out over the next seven years, plus reallocations within the budget.

Stakeholders' Highlights

  1. UNESDAEU Code of Conduct can showcase PPPs delivering healthier more sustainable society
  2. CESIKlaus Heeger and Romain Wolff re-elected Secretary General and President of independent trade unions in Europe (CESI)
  3. Nordic Council of MinistersWomen benefit in the digitalised labour market
  4. Nordic Council of MinistersReport: The prevalence of men who use internet forums characterised by misogyny
  5. Nordic Council of MinistersJoin the Nordic climate debate on 17 November!
  6. UNESDAMaking healthier diets the easy choice

Latest News

  1. MEPs call to halt Russia pipeline over Navalny arrest
  2. EU targets vaccinating 70% of adults by summer
  3. Portugal pushes to start delayed 'future EU' conference
  4. EU Parliament pressing for inquiry into Frontex
  5. Untapped potential of the single market could boost European recovery
  6. Biden's 'Age of Aquarius'? Mars and Venus will clash over China
  7. The new dimension of 'ever-closer union'
  8. What do new CDU chief's pro-Russia views mean for Europe?

Join EUobserver

Support quality EU news

Join us