Bloomberg News

Hollande Envoys Said to Brief ECB Officials on His Economic Plan

May 02, 2012

Francois Hollande, Socialist party candidate for the French Presidential election, at his capaign headquarters in Paris on April 30, 2012.   Photograph: Maxppp/Landov

Francois Hollande, Socialist party candidate for the French Presidential election, at his capaign headquarters in Paris on April 30, 2012. Photograph: Maxppp/Landov

Aides to French Socialist presidential candidate Francois Hollande have had contacts with top European Central Bank officials to brief monetary policy makers on his economic plans, four advisers to Hollande said.

Hollande’s team has spoken to at least two members of the ECB’s executive board, said the advisers, who declined to be named because the discussions were confidential. An ECB spokeswoman denied any such contacts have taken place. She spoke on condition of anonymity, in line with ECB policy.

The meetings and telephone conversations, which began last year and have carried on as Hollande’s campaign progressed, underscore concern that a change in government in Europe’s second-largest economy risks upsetting efforts to quell the region’s financial crisis.

“Given the complexity of Europe’s problems, I would hate for a new government to come into a political vacuum,” said David Owen, chief European economist at Jefferies Securities International in London. “It’s reassuring.”

The Socialist leads in polls for the May 6 runoff after winning the first-round vote. A BVA survey published today gave him an advantage of 53.5 percent to 46.5 percent over incumbent President Nicolas Sarkozy. No margin of error was given.

Both candidates made the ECB a campaign issue. Hollande has called on the ECB to lend directly to governments and Sarkozy wants to expand the Frankfurt-based bank’s mandate to including spurring growth and not just controlling inflation. Germany opposes both proposals.

French Spread

France was stripped of its AAA credit rating in January by Standard & Poor’s and the premium it pays to borrow over Germany is about 135 basis points, compared with about 30 basis points a year ago.

With French jobless claims at a 12-year high, Hollande has called for the region’s budget pact to be re-negotiated to include plans on growth. He has said that his government won’t ratify the treaty agreed by 25 European Union countries last March in its current form.

While both ECB President Mario Draghi and German Chancellor Angela Merkel said last week that they’re amenable to adding commitments to growth to the accord, their definition is unlikely to be the same as Hollande’s.

“It’s not the same idea of growth,” Hollande said April 26. Draghi is “adding even stronger competition, liberalization and privatization.”

To contact the reporters on this story: Helene Fouquet in Paris at hfouquet1@bloomberg.net; Mark Deen in Paris at markdeen@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net


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