France/Germany/European economic government/ECB independence/European economic strategy – Greece – European monetary fund – Economic predictive tools/ECB/exchange rates
FRANCE/GERMANY/EUROPEAN ECONOMIC GOVERNMENT/ECB INDEPENDENCE/EUROPEAN ECONOMIC STRATEGY
THE PRIME MINISTER – (…) Today we have again noted that when it comes to economic and financial policy the approaches of France and Germany were closer than ever and capable of giving a lead to Europe. (…)
We expressed our common determination to create a European economic government with the European Council at its centre, bringing together all the Heads of State and government. We have together asserted our determination to see the Stability Pact and Central European Bank independence maintained in full. We talked about the need for the European economic strategy also to cover the external dimension and recognize the importance of industry for future growth. We both asserted the need to get public finances back on track and carry out the essential reforms and forward-looking investment in research, higher education, security and energy efficiency to prepare tomorrow’s growth. We are wholly in agreement on the need to speed up – as we’re going to do in France – the pace of structural reform.
We, of course, discussed Greece’s situation. We, France and Germany, agree on the attitude we have to take.
1) The efforts which the Greek Prime Minister has set in train are very significant and commensurate with the challenge Greece has to meet.
2) We reaffirmed the solidarity of Euro Area countries vis-à-vis the Greek situation.
3) We agree to explore ideas on instruments for the medium term, which could be used in the event of crises of this type persisting or reoccurring, and the proposal for a European monetary fund is on the table.
I think that the Franco-German relationship isn’t only symbolic, with meetings and speeches, for us it’s a daily fact of life.
EUROPEAN MONETARY FUND/IMF
Q. – (On the proposal for a European monetary fund).
THE PRIME MINISTER – I’ve already told you that we thought this proposal of a European monetary fund supplementing the instruments already existing in European texts to ensure solidarity in the Euro Area an interesting one. It’s a proposal for the medium-term, given the stages which would have to be gone through to implement such an instrument, were we to do so. So it isn’t a proposal designed to address the most immediate and most urgent problems, but one we must evaluate swiftly in order, together, to see under what conditions this fund can be established.
I think there’s no competition at all with the IMF, since we are in a very specific situation: there’s no other area in the world where States have given themselves a common currency with the same binding rules – and ours are extremely binding – which explain why we’re thinking about complementary instruments to ensure solidarity. (…)
ECONOMIC PREDICTIVE TOOLS/ECB/EXCHANGE RATES
Q. – You talked to the students of Humboldt University about new predictive tools, particularly to correct possible balance of payments imbalances, for example in the Euro Area. Could you expand a bit on what you have in mind? Second question on the ECB, you have also called on the ECB to discuss exchange rates with third country currencies. What do you mean by this as well?
THE PRIME MINISTER – I think this is really at the heart of the debate we want in the European economic government. There are imbalances even inside the Euro Area which may, eventually, become threats. There are, in balance of payments terms, imbalances which make it impossible for some States to return to balance. So these discussions mustn’t be taboo.
This doesn’t mean we have to provide new rules on or solutions to these issues. But we think that we have to tackle them, discuss them and together seek to correct the imbalances.
Similarly [we think] that we have to talk about exchange rates with the United States and with China. President Sarkozy, in particular, is intent on putting this subject on the table in the G20 discussions./.