Bloomberg News

Sarkozy Says Merkel Backed ECB Loans 2 Weeks Before Announcement

May 02, 2012

French President Nicolas Sarkozy says he struck a deal with German Chancellor Angela Merkel to back three-year loans to banks by the European Central Bank at a summit two weeks before the policy was announced by the ECB.

In a campaign debate against his Socialist challenger, Francois Hollande, Sarkozy took credit for the loans that have helped ease the region’s financial crisis. He said the key meeting was at Nov. 24 meeting in Strasbourg, France, with Merkel and Italian Premier Mario Monti.

Responding to Hollande’s criticism that he had bowed to Germany throughout the crisis, Sarkozy retorted, “the stability of economic governance? Germany didn’t want it, it was a French request.”

“Secondly,” Sarkozy continued, “when the ECB lends at 1 percent, as you mentioned, violating the letter of its treaties, I obtained this at the Strasbourg summit with Monti, from Germany.” ECB President Mario Draghi announced the unlimited three-year loans Dec. 8.

At the three-way press conference in Strasbourg at the time, Sarkozy said France agreed to stop pressuring the ECB to step up its response to the debt crisis. “On institutions like the ECB, it is true we don’t have the same history,” Sarkozy said at the time. “When we say we won’t make comments, it has a meaning. We’ve made a positive compromise here.”

To contact the reporter on this story: Helene Fouquet in Paris at hfouquet1@bloomberg.net

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


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