October 30, 2011 / 2:35 PM / 8 years ago

Sarkozy under fire for seeking China cash for Europe

PARIS (Reuters) - France’s opposition Socialists have attacked President Nicolas Sarkozy for seeking Chinese help in solving the euro zone debt crisis, tapping into voters’ concerns six months before a French presidential election.

Party leader Martine Aubry said Europe had been shown to be weak by turning to Beijing, following up on accusations by Socialist presidential candidate Francois Hollande that France had become “double dependent” on Germany and China.

“It’s shocking,” said Aubry in comments published on Sunday. “By turning to the Chinese the Europeans are showing they are weak. The response should have been European,” she told the Journal du Dimanche newspaper.

Sarkozy played lead role with German Chancellor Angela Merkel in crafting a European plan last week to restore financial market confidence and end a two-year crisis started by Greece, with a contribution from Beijing if possible

He went on French TV last Thursday to explain that the plan hatched after tough negotiations between European leaders and bankers had averted catastrophe, saying he had phoned Chinese President Hu Jintao and felt Beijing had a “major role to play”.

But Aubry said the appeals risked scuppering Europe’s efforts to secure fairer terms for trade competition with China. “How will Europe now be able ask China to stop undervaluing its currency and accept reciprocal trading terms?” she said.

Washington and Europe have complained for years that China’s yuan exchange rate is being kept artificially weak versus their free-floating currencies and that this makes low-wage Chinese exports even more unbeatable in world markets.

Klaus Regling, who heads Europe’s bailout fund, visited China on Friday and Saturday to encourage Beijing to invest in the European Financial Stability Fund. [ID:nL5E7LS24I]

Aubry said the European leaders should have sought a solution possibly involving European Central Bank funding.

“The financial stability fund should have been bolstered by turning it into a bank and giving it the possibility to finance itself through euro bonds or via the ECB. But incapable of doing that, they turned to China,” she said.

Sarkozy has yet to declare he is running for re-election. But his TV appearance, watched by 12 million, was widely seen as a warm-up before he enters a contest for which he badly trails Hollande in opinion polls.

Hollande has accused Sarkozy of playing second fiddle to Germany within the euro zone and China globally.

“What we’ve ended up with now is a double-dependence. We’re dependent on Germany, which sets the rules of the game (in Europe) and dependent on China, which is being elevated to the status of the economic and financial empire that will fly to the rescue of the European Union and the (euro) zone,” he said in a TV appearance on Friday.

France’s 45 million voters will choose a new president in a two-round ballot next April and May and regular opinion polls show they want a change after five years of Sarkozy, raising Socialist hopes of a return to power.

Sarkozy used his TV appearance to put the focus firmly on the economy, seeking to portray himself as the best leader to ensure that France can reduce its national debt without subjecting the population to the kind of austerity that has provoked violent protest and despair in Greece.

While Sarkozy himself has faulted China on many occasions in the past over the yuan exchange rate, he has resorted to softer diplomacy in his role as this year’s president of the G20 club,, which concludes with the November 3-4 summit in Cannes, attended among others by China’s Hu.

A prominent member of Sarkozy’s centre-right UMP party, former prime minister Jean-Pierre Raffarin, told Journal du Dimanche that making a stand against China was pointless.

“We cannot go it alone. China has taken over the baton and become banker to the world. That’s the new deal of the 21st century,” he said.

editing by David Stamp

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