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4th Dec 2022

Sarkozy in fresh call for eurozone 'government'

French president Nicolas Sarkozy on Tuesday (21 October) renewed calls he made last week for the creation of an "economic government" for countries using the euro, in order to react better to crisis situations such as the current global financial turmoil.

"It is not possible for the euro zone to continue without a clearly identified economic government. We cannot go on like this," Mr Sarkozy, whose country currently holds the rotating EU presidency, told MEPs gathered for a plenary session in Strasbourg.

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  • "It is not possible for the eurozone to continue without a clearly identified economic government," says the French president (Photo: European Parliament - Audiovisual Unit)

"It is a funny idea to think that we can have the same bank [ECB], the same currency, the same market and that speaking of a [common] economic policy is not good. Honestly, it is a curious idea," he said.

The French president explained that the "government" in question should gather regularly at the level of heads of state and of government.

He did not specify how often the meetings would take place, but stressed that "we will not be able to go on for eight more years without gathering the eurogroup at the level of heads of state and of government. I think it is not reasonable."

The first such meeting took place some two weeks ago in Paris as an ad hoc response to the financial crisis.

European Commission president Jose Manuel Barroso meanwhile told journalists after the parliamentary debate that he was in favour of "strengthening all mechanisms of coordination of the economic policies of EU states."

"At the same time, one must not create the illusion - which in my opinion would be very dangerous - that this would mean giving instructions to the European Central Bank, putting into question its independence," he said.

Mr Sarkozy also proposed a meeting of EU leaders to take place in order to prepare for a series of international summits to be held before the end of the year on the financial crisis, aiming to put in place a global financial overhaul.

"I will have the opportunity to propose to my fellow heads of states and government a meeting to prepare for these summits," he told MEPs.

Protecting EU manufacturers

The French president also renewed his calls for more aid to be granted to European industries, in particular to car manufacturers.

"Can we leave the European car industry in a situation of grave distortion of competition with our American competitors," said the president of France - a country where the car industry is strongly developed and which recently announced a plan to spend €400 million over the next four years to support the development of more eco-friendly vehicles.

"We should be able to manufacture ships, cars, aeroplanes in Europe because Europe needs a strong industry and on that policy the presidency will stand up and fight," he added.

The EU president-in-office did not stop there, proposing that European governments set up so-called sovereign wealth funds to buy stakes in EU companies to keep them safe from takeovers by foreign ones.

"Stock markets are at historic lows. I do not want European citizens to wake up a few months from now and discover that European companies belong to non-European capital which has bought at the lowest point of the stock exchange," Mr Sarkozy told MEPs.

"I would ask that all of us consider how interesting it would be to set up sovereign funds in each of our countries - and maybe these national sovereign funds could now and again coordinate to give an industrial response to the crisis," he added.

Mr Sarkozy - a typical socialist?

The French president's comments prompted the leader of the European socialists, German MEP Martin Schulz, to make fun of him for his interventionist ideas.

Mr Sarkozy "is talking like a good old-fashioned European socialist," said Mr Schulz, while adding that Mr Barroso, who several times backed the EU president-in-office, was also behaving "like a true left-winger."

Both the commission president and the French leader belong to the centre-right EPP-ED party.

Despite his support for most of Mr Sarkozy's ideas, Mr Barroso called for caution against protectionist tendencies in the EU in the wake of the financial crisis.

"The European Commission is in principle in favour of all measures of support to industry, economy, employment, growth - if these measures are not discriminatory, if they do not put into question the EU's internal market," he said.

"One thing must be clear. There is no national road out of this crisis. Our economies are too intertwined - we will swim or sink together. We must not give in to siren calls for protection. We must not turn our backs on globalisation or put our single market at risk," he told EU parliamentarians.

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