PARIS (MNI) – The European Central Bank must do its part to support
economic growth in the Eurozone in exchange for governments’ commitment
to reduce deficits, Nicolas Sarkozy, candidate for re-election as
president of France, argued Tuesday.

“It’s not possible for the central bank not to participate in
supporting growth — like all central banks in the world,” Sarkozy
asserted in a radio interview, citing the US Federal Reserve and the
central banks of Japan and China as examples.

Sarkozy did not go so far to say, as he had hinted at a weekend
rally, that the mandate of the ECB must be modified, conceding that this
could take years without guaranteed results. Nevertheless, “certain
essential questions” concerning its role must be posed, he said.

“Precisely because of [the ECB's] independence, a discussion must
be possible,” Sarkozy said. “The condition of independence is dialogue.”

Long an advocate of a more active role for the ECB in the economy,
notably through an aggressive exchange rate policy, Sarkozy had backed
off from his demands during the delicate negotiations with Germany late
last year over tougher fiscal controls for Eurozone governments.

Foreign exchange rate policy must be a topic of this dialogue,
since the ECB shares responsibility is this sphere with the heads of EMU
governments, the French president said, reviving a classic debate that
has lingered since the inception of monetary union. He welcomed the
recent depreciation of the euro as a gain of competitiveness.

If France wants to “make the ECB move,” it must not give the
impression that it is in order to escape the necessity of fiscal
consolidation, Sarkozy said, reiterating his pledge to bring the
country’s public finances into balance by 2016.

Distinguishing himself from his main campaign adversary, Socialist
candidate Francois Hollande, Sarkozy insisted on the need to tackle the
“massive problem” of labor costs in France and to boost competitiveness
via a “new growth model” based on professional training, innovation,
investment and the reduction of public spending.

–Paris newsroom +331 4271 5540; email: ssandelius@marketnews.com

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