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7th Jul 2022

Germany defends ECB from Sarkozy proposal

  • Sarkozy's ideas do not sit well with Merkel - but his own aides have suggested he is all electioneering (Photo: consilium.europa.eu)

Germany has rejected Nicolas Sarkozy's idea to change the rules of the European Central Bank (ECB) bank if he gets re-elected as French president.

“The German position on the ECB and its role – independent of encouragement and assistance from politics – is known, also in Paris, and has been unchanged for a long time,” German government spokesman Steffen Seibert told a press conference in Berlin on Monday (16 April).

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He added that Berlin agrees with Paris on the need to boost growth and employment in Europe, but suggested this was not a task for the eurozone central bank.

On Sunday, Sarkozy said that if re-elected in May, he would push for a revamp of the rules governing the Frankfurt-based bank to support growth more actively. Currently the bank's task is limited to price stability.

But his comments were downplayed by some of his own aides who told Le Monde anonymously that the "candidate" Sarkozy has the "liberty" to talk about issues he cannot as a president.

Germany's Angela Merkel, Sarkozy and Italy's Mario Monti last November agreed to no longer talk publicly about the role of the bank amid fears that the institution would be perceived as being under political influence.

But Sarkozy on Sunday said "we cannot have taboo subjects". His comments came as he trails the Socialist contender Francois Hollande in polls. Hollande's campaign has been focussed on growth measures.

Another aide to the French president told Reuters that Sarkozy knew he would have "no chance" of getting the ECB's mandate changed to include provisions for supporting growth.

"What we want is for there to be a dialogue between the economic government (of Europe) and the ECB on all important issues and in particular exchange rate policy," the aide said.

But the Danish minister of economy, who is chairing the meetings of EU finance chiefs on Monday, said all this talk was counter-productive.

"I think that the European Central Bank could only act when politicians stop talking about what the central bank should do," Margrethe Vestager told an audience in Copenhagen.

"It is very important that the Central Bank is independent in handling monetary policy, and when Merkel and Sarkozy backed off the Central Bank, then it started to act, and to make sure that the equity was more available than it had been. And I think that the reason why we are in a more stable situation now is very much due to the fact that there is an active monetary policy by the ECB," she said.

Sarkozy wants new role for euro bank

One week before elections, French incumbent Sarkozy has said the ECB should get a new mandate on economic growth - a no-go area for Germany.

Merkel and Sarkozy: The end of the affair?

She needed him to soften the idea Germany runs Europe. He needed her to show France still counts - but the political love affair is looking less useful than before.

Rising prices expose lack of coherent EU response

The increasingly sharp debate over the rising cost of living exploded in European Parliament, with lawmakers from all stripes, liberal, left, green and conservative, calling on the EU to act.

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