Sarkozy heading for EU showdown

silverharp

This is from the BBC today, He wants France to be able to borrow above 3% and wants the Euro devalued. For someone who is supposed to be right of centre, he seems to be very left in his economic thinking. Inflation is bad enough in the EU without France wanting to throw more fuel in the fire





Sarkozy heading for EU showdown


France's president is heading for a showdown with European finance ministers at a meeting.
Nicolas Sarkozy will ask the European Union (EU) to bend its fiscal rules to help avoid a French economic slowdown.
Mr Sarkozy wants to cut French taxes, a move that means France will breach a 3% budget deficit rule set by the EU.
It will be the first time a head of state has attended a meeting of finance ministers since Silvio Berlusconi went in 2004 to defend Italy's budget.
Mr Sarkozy, who became president eight weeks ago, has argued that France needs to cut taxes by 11bn euros ($15bn; £7.5bn) and reform higher education in order to tackle the country's spiralling unemployment problem.
Should he win the backing of EU finance ministers, then it would mean France failing to balance its books until 2012, two years later than a deadline set by the last government and the EU in April.
Mr Sarkozy is expected to meet with ministers later on Monday.
Deadline delay
However, critics say that the move will push France's public deficit above EU guidelines, just months after rising exports and a revival in the Eurozone economy helped it fall below the 3% limit.
French Prime Minister Francois Fillon confirmed last week that France wanted to delay meeting EU deficit rules until 2012.
The plan has already drawn opposition from Germany and Portugal.
"If it were to be confirmed that France is dropping out of the so-called midterm objectives that we agreed with France, with everyone...then there will be a problem," German Finance Minister Peer Steinbrueck said.

I voted for the euro, I believe in the euro. But in the end, currency is not a taboo subject

Nicolas Sarkozy
European Central Bank chief Jean-Claude Trichet has also voiced concerns that a "certain member" of the EU is in favour of breaching EU budget rules.
However, book balancing is not the only issue that Mr Sarkozy is likely to clash with the EU about during the meeting in Brussels.
Last week, the French president broke with protocol to criticise the central bank for allowing the euro to appreciate too much. France claims the strong euro hurts its exports.
Over the past six years the currency has appreciated by 60% against the dollar.
"I voted for the euro, I believe in the euro. But in the end, currency is not a taboo subject. I want it to be of use to growth, of jobs for your children," he said during a speech in Strasbourg.
However the comments were seen as controversial as Germany and the central bank fought hard for monetary issues to remain free from political interference.

mike65

France does'nt have rightist when it comes to the economy. Sure it did'nt take him long did it?

Italy will be lining up behind him I'm sure as they are in some deficit trouble at the moment.

Mike.

Akrasia

mike65 wrote:

France does'nt have rightist when it comes to the economy. Sure it did'nt take him long did it?

Italy will be lining up behind him I'm sure as they are in some deficit trouble at the moment.

Mike.

I don't see how Ireland will be able to complete our NDP without breaking the 3% rule now that our economy is in freefall.

The Euro has been a complete disaster for Ireland's economy (but good for pirates and vultures who made a killing exploiting an overheating poorly managed economy).
When we needed high interest rates they were low. When we needed a strong currency it was weak, Now we need a weaker currency and lower interest rates, and the exact opposite is happening. We've been caught on the wrong side of a double helix.

We're going to need to borrow money in the short and medium term, but we'll be screwed by Euro rules unless the French and Italians can set up a non compliance precedent

Fratton Fred

Akrasia wrote:

I don't see how Ireland will be able to complete our NDP without breaking the 3% rule now that our economy is in freefall.

The Euro has been a complete disaster for Ireland's economy (but good for pirates and vultures who made a killing exploiting an overheating poorly managed economy).
When we needed high interest rates they were low. When we needed a strong currency it was weak, Now we need a weaker currency and lower interest rates, and the exact opposite is happening. We've been caught on the wrong side of a double helix.

We're going to need to borrow money in the short and medium term, but we'll be screwed by Euro rules unless the French and Italians can set up a non compliance precedent

which is why I believe Europe was not ready or the Euro. The economies are still too diverse.

mike65

If they break the 3% rule and get away with it then we might as well end the Euro. Pity I kinda liked its practicality even if as you say the rates were never appropriate to our economy.

Mike.