France's Sarkozy stakes crisis leadership claim
PARIS (Reuters) - French President Nicolas Sarkozy was uncharacteristically silent when the global financial crisis broke last month, but he has seized the chance to lead from the front as Europe struggles to come up with a unified response.
With U.S. President George W. Bush largely sidelined in the crisis and the leaders of Britain and Germany facing domestic political troubles, Sarkozy has seen a gap and tried to fill it.
After hesitating at first, he has lambasted "crazy" unregulated free markets, pledged tougher market controls, attacked golden parachutes for failed bank chiefs and proposed a summit of world leaders to coordinate responses to the crisis.
"All that is image, posture, words -- but words are important in politics," said Jerome Fourquet, deputy head of opinion research at pollsters Ifop in Paris.
"French people aren't fools. They know Nicolas Sarkozy doesn't have a magic wand to save them from the troubles and turbulence that are affecting the financial planet, but they wouldn't forgive him for not trying."
Sarkozy had been expecting to use France's six-month presidency of the 27-state European Union to deal with issues ranging from climate change to immigration policy, defense and agriculture.
Instead, he has been confronted by Irish voters rejecting the EU's reform treaty, Russia's brief war with Georgia and now the biggest financial crisis since the Great Depression.
Aside from the rhetoric, he has committed 3 billion euros of French money to bailing out French-Belgian bank Dexia (DEXI.PA), and, shrugging off the dire state of public finances, pledged that no depositor would lose a single euro if a French bank got into trouble.
Finance Minister Christine Lagarde has also floated the idea of a special European rescue fund for troubled banks.
"The reaction has been extremely strong," France's junior minister for European Affairs, Jean-Pierre Jouyet, said on Wednesday. "We were the first in Europe to say that Europe would not get out of this unscathed."
CHEERLEADERS
The burst of activity followed Sarkozy's shuttle diplomacy between Moscow and Tbilisi last month to try to resolve the Georgian crisis and carries all the hallmarks of a style viewed with a mixture of admiration and annoyance outside France.
"The French presidency under the leadership of President Sarkozy has been distinguished by the energy and theater for which he is well known," Nick Clegg, the leader of Britain's Liberal Democrats, said at an event in Paris this week.
"But however much energy you have or however much you personalize the presidency of the European Union, you should never forget it is just six months. You cannot change the world in six months," he said.
Sarkozy has called a meeting of European leaders this week to prepare the way for the summit of world leaders which he hopes will take place later this year. This has also provoked mixed reactions.
After delays over scheduling the meeting on Saturday, a spat broke out between Paris and Berlin over Lagarde's suggestion of a European "safety net" for troubled banks.
Germany poured cold water on that idea and, when reports broke that the French proposal could include a 300-billion euro bailout bank package, did not wait for denials from Paris before declaring its firm opposition to any such plan.
The signs of discord underlined the difficulty of finding a common approach to the financial crisis, despite European Commission appeals for more consistency in deposit guarantee schemes and stronger pan-European financial supervision.
With British Prime Minister Gordon Brown fighting to lift his weak approval ratings and Germany's Angela Merkel heading an increasingly fractious coalition, Sarkozy is looking to use his unquestioned authority at home on a wider stage.
But having gone out on a limb in summoning the meeting this week, he is taking a risk and needs concrete results rather than declarations if his leadership credentials are to remain intact.
Like it or not, that may mean pledging more public money, in some form or other.
"Banks aren't going to believe a politician just trying to boost confidence using words, they'll want something much stronger than that," said Alan Ahearne, a researcher at the Brussels-based Bruegel think tank.
"In Europe at this stage it's governments getting behind banks. Those are substantive moves. We can't cheerlead our way out of this crisis. The crisis is too deep now."
(Additional reporting by Crispian Balmer and Sophie Louet; Editing by Timothy Heritage)
