Bloomberg News

Draghi Says He Had No Knowledge of Loan Deal Cited by Sarkozy

May 03, 2012

European Central Bank chief Mario Draghi said he was unaware of a deal that French President Nicolas Sarkozy said was struck with German Chancellor Angela Merkel to back ECB loans to banks before the policy was announced by the central bank.

“I didn’t know it, I didn’t know it. I knew nothing about this agreement, so I don’t know,” Draghi told reporters today in Barcelona when asked about Sarkozy’s account. Merkel’s spokesman, Steffen Seibert, declined to comment when contacted by text message.

In a campaign debate late yesterday against his Socialist challenger, Francois Hollande, Sarkozy took credit for the loans that have helped ease the financial crisis. He said the key meeting was a Nov. 24 gathering in Strasbourg, France, with Merkel and Italian Prime Minister 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.” Draghi announced the unlimited three-year loans Dec. 8.

French government spokeswoman and Budget Minister Valerie Pecresse declined today to elaborate on Sarkozy’s comments.

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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