Brussels, 16/04/2012 (Agence Europe) - Less than a week before the first round of voting in the French presidential election, the two leading candidates in the polls commented at the weekend about two issues relating to the eurozone sovereign debt crisis. On the right, current President Nicolas Sarkozy said that the European Central Bank should take action to promote growth, while on the left, Socialist candidate François Hollande opposed the new financial instrument to hedge against the risk of a rise in the yield demanded for French bonds sold on the markets. The German chancellor, Angela Merkel, is reported as saying that the German government is certain that the ECB must carry out its work completely independently of politics.
ECB. Sarkozy said that after what had been done to save the euro, he wanted to raise not only the question of borders, but also that of the European Central Bank in terms of supporting growth. He said it was a crucial question that had to be looked into and couldn't be avoided if Europe wants to avoid losing ground in the global economy, where growth is vital. Recommending that Europe should be a place where there is manufacturing and investment, he added that there were limits to the Maastricht Treaty rules establishing monetary union and this was a question that had to be looked into because it was an important strategic problem for the future of Europe. Europe has to pay off its debts, he said, adding that there was no other way. Sarkozy said that Europe did not have the choice of whether to go for deflation or growth, because if it chose deflation, it would disappear. He did not give any indication about how the ECB could stimulate growth. French newspaper Les Echos said that rather than changing the ECB's rules and regulations, it was more a matter of entering dialogue about an exchange-rate policy that helps exports. At the height of the eurozone debt crisis, France recommended that the European Stability Mechanism (the future bailout fund) should be turned into a kind of bank so that it can borrow from the ECB's virtually bottomless cash deposits in order to get round the EU Treaty rule that the ECB is not allowed to finance eurozone nations' debt. The French idea was rejected immediately by Germany.
“Future”. The French left is up in arms at the new futures contract for France's long-term debt marketed by Eurex, a subsidiary of Deutsche Börse, on Monday 16 April following authorisation from the French Treasury Agency (AFT). Sold over-the-counter, the futures contract allows investors to hedge against fluctuations in the interest rates on French debt, currently close to 3%. Its promoters say it will help solve cash-flow problems on the markets, but its detractors say it is simply a way of speculating on French bonds. Currently leader in the polls for the second round of the election, Hollande said on the Mediapart website that he wants the futures contract to be banned, quoting comments from the head of the Autorité Française des Marchés, socialist Jean-Pierre Jouyet, that introducing a futures contract did not send the right signal in the current situation. MEP Pascal Canfin (Greens/EFA, France) said futures can be used for pure speculation (on the impact of the French presidential results in the second round of the elections on 6 May, for example). In a column in French newspaper La Tribune, Canfin accused AFT of not making it a condition that the new futures contract should only be available to customers owning French debt, the soon-to-be-introduced EU rule for credit default swaps for sovereign debt. (MB/transl.fl)