April 16, 2012 / 12:11 PM / 8 years ago

Sarkozy not seeking ECB mandate change, aides

PARIS/BERLIN (Reuters) - Germany rebuffed French President Nicolas Sarkozy’s call for a debate on the European Central Bank’s role in promoting economic growth on Monday, reaffirming its attachment to the ECB’s independence.

France's President and UMP party candidate for the 2012 French presidential elections Nicolas Sarkozy, leaves a political rally on the place de la Concorde in Paris, April 15, 2012. REUTERS/Eric Feferberg/Pool

The conservative Sarkozy, trailing Socialist rival Francois Hollande in opinion polls a week from round one of a two-round presidential election, told a campaign rally on Sunday that Europe needed to rethink the ECB’s role in supporting economic activity.

“If the ECB does not support growth, we will not have enough growth,” Sarkozy told some 100,000 supporters massed in Paris’ Place de la Concorde square. “It’s our duty to reflect on this issue. We cannot have taboo subjects.”

Aides said Sarkozy wanted a discussion of whether the central bank could better steer its exchange rate policy to favour euro zone exports and was not pushing for a change in the ECB’s treaty mandate beyond maintaining price stability.

German government spokesman Steffen Seibert, asked about Sarkozy’s comment, told a regular news briefing in Berlin: “It is the core belief of the federal government ... that the role and office of the ECB be independent of encouragement and assistance from politics. And that’s well known in Paris.”

French analysts brushed off the president’s remark as campaign rhetoric designed to attract nationalist Eurosceptical voters, as he had done during the 2007 election race.

The election race has descended in recent days into bickering over France’s economic health, with Sarkozy warning that an Hollande victory could scare off investors and Hollande saying any darkening of France’s credit outlook would reflect Sarkozy’s five-year term, not his own arrival in office.

Hollande called in his own manifesto for the ECB’s mandate to be revised to add a responsibility for promoting growth, while radical presidential candidates have said the central bank should be allowed to lend directly to governments.

One Sarkozy aide, asking not to be quoted by name, said the president 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.

French governments have frequently pressed for a cheaper euro to promote the country’s exports of aircraft and cereals, to no avail. But the refrain strikes a chord with voters.

Jean-Francois Cope, secretary-general of the ruling UMP party, said Sarkozy would seek a broad debate on the ECB’s role if he wins re-election on May 6.

“After the election it will be one of the issues that deserves to be dealt with, even if for now it’s premature to talk about what kind of format the talks could take,” Cope told a meeting with foreign media. “We could bring up the role of the ECB with our European partners after the election, for sure.”


Politicians have long sought to score points with voters by suggesting the ECB’s mandate should be extended to bring it more in line with that of the U.S. Federal Reserve, which has a double mission to ensure price stability and full employment.

Some economists also argue the ECB’s single mandate is a hindrance to the euro zone’s ability to resolve its debt crisis.

Berlin steadfastly opposes any extension of the ECB’s role however, and sees capping inflation as the best way to promote growth by keeping down medium and long-term interest rates.

The French daily Le Monde cited an unnamed official as saying Sarkozy also wanted the ECB to be able to reactivate a dormant bond-buying programme to support countries in difficulty. “If tensions resurface over Spain, we would need to be able to use that,” the official was quoted as saying.

Sarkozy’s comments on the ECB - capping a string of populist proposals on everything from immigration to trade - ran counter to an agreement he made with German Chancellor Angela Merkel in November to cease commenting publicly on the ECB’s role.

Merkel’s spokesman Seibert said Berlin agreed on the need for sustainable growth in Europe and had taken initiatives with the French government to that end.

Sarkozy has clashed with Berlin during his time in office over the ECB’s role, having pushed for it to take a more direct role in resolving the euro zone’s debt crisis.

The Frankfurt-based ECB defines and implements euro zone monetary policy, conducts foreign exchange operations and looks after the foreign reserves of Europe’s central banks.

It expanded its role as Europe’s debt crisis exploded, first by buying up struggling countries’ debt on the secondary market and more recently by lending banks 1 trillion euros in cheap three-year funds.

Hollande’s election manifesto calls for the ECB to have a role in driving economic growth. He also wants a recent European pact on budget stability renegotiated to add pro-growth clauses.

Sarkozy, who made a show of standing shoulder-to-shoulder with Merkel in Europe’s debt crisis, has raised eyebrows by calling for trade protection and vowing to pull France out of the EU’s open-border Schengen zone unless external frontiers are tightened.

Etienne Gernelle, editorial director of weekly news magazine Le Point, told BFM TV Sarkozy and other candidates were merely using Europe as a punching bag.

“They all talk nonsense on Europe because it’s easy, it’s not there to defend itself,” he said. “It’s totally irresponsible on the part of all French politicians.

Reporting by Emmanuel Jarry, Yann Le Guernigou and Nick Vinocur in Paris,; Annika Breidthardt in Berlin; Writing by Catherine Bremer; Editing by Paul Taylor

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