Thursday

29th Feb 2024

Sarkozy pushes for more control of European Central Bank

French President Nicolas Sarkozy, a long-time critic of the European Central Bank's monetary policy, is set to push for a change in the way the Frankfurt-based body is run.

According to the Financial Times, France is working on a three point plan, which should encourage EU states to express their views on the ECB's monetary policy - something that Paris considers "legitimate".

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  • The French president wants greater co-ordination between the ECB and the eurogroup (Photo: European Community)

Mr Sarkozy wants the ECB to publish regular minutes of its governing council meetings where interest rates are set. Currently, this is done behind closed doors.

He would also like to see the development of a permanent secretariat for the eurogroup - representing finance ministers from countries using the euro currency - in order to boost its policy co-ordination with the ECB.

In addition, French leader wants to establish an "economic government" for the eurozone.

Such French-tailored ideas are likely to ruffle feathers in several EU capitals and Frankfurt, where they could be seen as yet another attempt by France to challenge the ECB's independence.

The bank has for a long time opposed the idea of publishing minutes, arguing it would put national central bank governors under enormous pressure to explain their position to national audiences.

But the UK financial daily says France does not aim to push the plan during its EU presidency, running until December 2008, as it could prove too divisive. "We must convince our partners that our project is not a Trojan horse," a senior French official told the paper.

Most recently, at the beginning of July, President Sarkozy criticised the ECB for raising the rates in order to bring inflation levels down.

"The ECB should ask itself some questions about economic growth in Europe and not just inflation," he said at the time, adding: "Inflation today is due to the boom in [prices of] raw materials. You can't tell me that in order to fight inflation you have to raise interest rates."

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