Tuesday, July 10, 2007

What is Sarkozy up to?

Ever since the new president of France bounced June's European Council into accepting an amendment to the "mandate" on competition, the "colleagues" have been a little wary of a man they are calling the "dynamo".

Now, the IHT is reporting that he has clashed with the finance ministers of the so-called Eurogroup – those who represent the countries currently in the single currency.

It is rare enough for a head of state to attend such meetings, but Sarkozy was there to present in person plans to restructure the ailing finances of his own country, in so doing driving a cart and horse through the growth and stability pact.

This seems to be the issue that is troubling the colleagues, as the new president is signalling that he intends to put domestic priorities ahead of EU rules, arguing that he wants to introduce a raft of tax cuts worth €15 billion, which will mean that France is likely to breach a pledge made by all EU members in April to bring their deficits to zero by 2010.

Airily, Sarkozy says that he would try to eliminate France's budget deficit by 2010, but could not guarantee it before 2012.

According to IHT, EU officials (including Barroso) appeared increasingly uneasy with his efforts to put France back in the EU driver's seat, indicating that his fealty was to French economic interests rather than EU rules. He noted, we are told, that France needed to reduce the deficit, not because of European rules, but because it was weighing on the growth and confidence of France.

Politically, this is quite interesting because French presidents usually play the Europe card more subtly, arguing that what is good for France is good for the European Union – "le UE c'est moi" stance.

Something of that did actually come through as Sarkozy enlisted the support of Luxembourg prime minister who, traditionally, leads the Eurogroup talks. Says the IHT, he played down the notion that Sarkozy was disobeying the rules of the club, saying his economic agenda was "not just something that's good for France and the French people - it's good for Europe as a whole."

However, it was only Luxembourg and Belgium that went for this position with other ministers distinctly glacial, not least when Sarkozy pushed for a weakening of the European Central Bank and also spent time promoting former French finance minister, Dominique Strauss-Kahn, as the next head of the International Monetary Fund.

Since Frenchmen already preside over three of the world's most august international economic organisations: Pascal Lamy at the World Trade Organization; Trichet at the European Central Bank; and Jean Lemierre at the European Bank for Reconstruction and Development, claiming yet another prestige position for France is a bit of a nerve.

One wonders what Sarkozy is playing at, taking such an overtly confrontational position so early in his presidency. An easy explanation is that he is playing to a domestic audience, demonstrating that he is in charge. But, seeing as this is European politics, there also has to be a hidden agenda.

Suspicious minds might think that the president is softening up his own public for the forthcoming treaty, showing that he is the boss in "Europe" so as to head off calls for a referendum. If that is the case, then what we saw at the Eurogroup meeting was another bit of theatre, which the Continentals so love.

Either way, Sarkozy is playing an interesting game. It may be some time before his motives become clear – if ever.

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