The eurozone finance ministers' chairman said on Friday French President Nicolas Sarkozy was neither noble nor correct to claim some of the credit for the European Central Bank's decision to keep interest rates on hold. On Thursday, Sarkozy suggested the ECB decision signalled a shift in the debate on ECB policymaking.
"This shows that as a result of talking and debating, things are moving forward a little bit," he said. But in a speech to the Belgian Business Federation Eurogroup chairman Jean-Claude Juncker criticised Sarkozy's remarks.
"If some leaders...declare that the fact that the bank did not increase rates as expected initially is due to their influence, that's not virtuous behaviour, that is not noble, that is not correct and that is risky," the Luxembourg prime minister said. "This way some French people think the ECB should be at their orders...is a way to upset the system and is in no one's interests," he also said.
Juncker's comments follows forthright reaction from Trichet himself on Thursday to Sarkozy's remarks. "We are in-de-pen-dent," he told the news conference following the ECB's rate-setting meeting.
Sarkozy has repeatedly called on the ECB to take more account of the strong euro, growth and jobs when setting interest rates, and not just inflation targets. France has blamed the ECB's rising interest rates for a rise in the value of the euro which Paris says is hitting French exports. It says the eurozone is alone in not using foreign exchange policy to its advantage in trade. Juncker agreed the ECB and eurozone governments shared responsibility for exchange rate policy but said ECB interest rates remained historically low.
"That's clear, it's staring in our faces," he said, adding the strength of the euro was not a problem and he preferred the currency to be strong rather than weak. "I prefer a strong euro to a weak euro," he said, in another apparent snub to Sarkozy who said in an interview published on Thursday that the ECB should support eurozone exports with its policy, implying a weaker common currency.
The euro traded at $1.3690/91 at 1112 GMT, well below the all-time highs of $1.3852 in late July. Juncker noted that French European Affairs Minister Jean-Pierre Jouyet a few years ago defended the independence of the ECB but has changed his tone since his appointment in Sarkozy's government earlier this year.
On the other hand ECB President Jean-Claude Trichet needed to be convinced of the benefits of central bank independence in the early 1990s as a French treasury official but was now a staunch defender of the bank's independence, he said.
The Eurogroup comprises eurozone finance ministers, the head of the European Central Bank and the EU commissioner for economic and monetary affairs. It provides the key forum for eurozone politicians to discuss policies with the ECB.