The World from Berlin Sarkozy Speech Bombs in Germany

French President Nicolas Sarkozy on Tuesday made a plea for an "economic government" for the euro zone. It was not well received. German politicians and commentators alike have blasted Sarkozy's idea.


French President Nicolas Sarkozy's speech before the European Parliament calling for a common European "economic government" has received bruising reviews in the German press.
AFP

French President Nicolas Sarkozy's speech before the European Parliament calling for a common European "economic government" has received bruising reviews in the German press.

What a difference a day makes. French President Nicolas Sarkozy made headlines on Tuesday with an ambitious speech before the European parliament in Strasbourg during which he called for a common "economic government" across the euro zone. The idea was to coordinate economic policy and to establish European sovereign wealth funds to help protect ailing European companies in key industries from being bought by cash-flush foreign investors.

On the morning after, however, as the first reviews come in, it's clear that the response to Sarkozy's attention-grabbing performance has not exactly been what he'd hoped for.

Nowhere more so than in Germany, where politicians, experts, and editorial boards have joined to issue a blistering critique of not only the French president's proposals, but also of his motives and theatrics.

German Economics Minister Michael Glos issued one of the first volleys, telling the Frankfuter Allgemeine Zeitung that Sarkozy's protectionist-sounding proposal "contradicts all the principles of success that we've had in our economic policies." Glos took special issue with Sarkozy's attack on foreign capital, declaring "Germany will remain open to capital from around the world."

Eckart von Klaeden, a foreign-policy spokesman for Chancellor Angela Merkel's Christian Democrats (CDU), called Sarkozy's plan infeasible. "There wouldn't even be enough capital," he said, referring to Sarkozy's desire to set up sovereign wealth funds to take ownership stakes in European firms.

Many critics noted that Sarkozy, far from generating anything new, was simply taking old French policies and trying to sell them at the European level. As Ruprecht Polenz, a CDU parliamentary leader put it, "Sarkozy is putting lousy French wine through a new hose but the quality of the wine isn't getting any better." Polenz went on to point out that "protectionist measures 80 years ago only exacerbated the world's economic crisis."

German media commentators were not any friendlier, painting Sarkozy's policy pronouncements as ill-considered and radically out of step with economic best practice.

The center-left Süddeutsche Zeitung writes:

"Hardly a day goes by now without Nicolas Sarkozy finding a microphone somewhere to proclaim some new idea with which he intends to save either the world, Europe, or at least France."

"First and foremost Sarkozy is looking out for his own interests, and in a rather boorish way. Because he holds the rotating presidency of the European Union until the end of the year, he now intends to use his ideas -- which until now only the French have had to withstand -- for the benefit of Europeans as well… What Sarkozy is now proposing for Europe is the same thing he did a couple years ago to the (French) company Alstom when he was still Interior Minister. He saved the firm (and Siemens) from bankruptcy through a partial nationalization. Today Alstom is a model enterprise -- thanks to Sarkozy. This, at any rate, is the way that the president relentlessly presents it."

"With the Alstom episode, Sarkozy already demonstrated an important characteristic: he is a crisis politician.... Europeans will have to endure this until the end of December. After that, the EU president emeritus will fall into a terrible funk if he doesn't manage to find another playground."

The Financial Times Deutschland writes:

"(Sarkozy's) plan is inappropriate for three reasons. First, simply establishing sovereign wealth funds would not create a forum in which the EU could facilitate a common approach to political and economic crises. It doesn't solve the core institutional problem."

"Secondly, EU states don't have the money to achieve Sarkozy's second goal: outbidding foreign investors who want to buy important European firms. For many companies -- Siemens, for example -- sovereign wealth funds from the gulf region or Asia are seen as a boon, because they possess capital that European governments and investors lack -- (Europe) will have even less, of course, after its gigantic bailout programs for banks."

"Thirdly, what's really dangerous about Sarkozy's plan is what he's targeting. Foreign sovereign wealth funds have, up to this point, helped to stabilize banks. Even now the Italian firm Unicredit is drawing on support from the Libyans. If the EU followed Sarkozy's line, it would risk scaring away one of the few actors that, alongside the state, is in a position to function as a source of capital for teetering banks."

The conservative newspaper Die Welt writes:

"What, exactly, a common economic government would bring when we're still light-years away from a common financial policy, remains (Sarkozy's) own secret. His suggestions are as dangerous as they are quixotic. Behind them is the illusion that the state can do anything if it wants to. Forgotten is the fact that hardly two decades after the fall of the Berlin Wall more than a billion people have managed, through the power of the market, to achieve a standard of living that before they could only dream of."

"Moreover, hidden behind all his European rhetoric is Sarkozy's own national interest. France, like other countries, is using the crisis to procure advantages for its own banks and enterprises -- at the expense of others. This threatens to turn into a dangerous subsidy and tariff race -- exactly the phenomenon that once before caused a financial crisis to turn into a global economic crisis."

The center-right Frankfurter Allgemeine Zeitung writes:

"History teaches us that financial crises tend to cause only a limited period of weak growth, and are usually followed by a brisk recovery. As long as there aren't any signs of a deep recession on the horizon, debt-financed stimulus programs are more damaging than they are useful. In addition to a stimulus package, Sarkozy is proposing that governments take ownership stakes in so-called key industries, a policy which has no rational justification and which could only be financed through debt or higher taxes. Politicians in Berlin and Paris are in the meantime talking about Switzerland and Luxembourg as if they were obscure, lawless tax-havens in the Caribbean. And naturally Sarkozy is seizing the opportunity to challenge the independence of the European Central Bank. In America, too, there exists the danger that state money will be used not to stabilize suffering banks, but rather to build up powerful financial firms. That would be an industrial policy coming at the expense of other countries. It is high time that politicians tempered themselves."

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