European politicians yesterday attacked the European Central Bank for paying too much attention to taming inflation and not doing enough to support flagging growth in the 12-nation euro zone.
Mr Nicolas Sarkozy, the French finance minister, criticised the ECB for focusing on its self-declared inflation target of "below but close to 2 per cent" more than the need to boost growth and create jobs.
His comments come the day after Mr Silvio Berlusconi, Italy's prime minister, said if the bank failed to lower interest rates in the coming months a "political committee" to help guide the ECB's decision-making should be created.
Mr Didier Reynders, the Belgian finance minister, also joined the fray yesterday, saying he hoped the central bank would "at least" keep interest rates steady, despite an upward lurch in inflationary pressures.
The comments coincide with this week's European elections which could deal serious setbacks to several governments.
Politicians have been seeking to shift the blame for sluggish euro-zone growth on to the ECB.
Speaking to members of his conservative UMP party, Mr Sarkozy said: "I believe in fighting against inflation, but first of all in fighting for economic growth and employment."
He questioned the ECB's inflation target, calling on the bank to adopt a model similar to the US where policymaking takes account of economic growth as well as inflation.
"What bothers me is this 2 per cent level and the fact that sustainable growth takes second place," he said. "It is something that could be looked at. I am a bit uncomfortable with it."
Mr Sarkozy, who has taken a strong interventionist stance since becoming finance minister two months ago, also called for a strengthening of the euro group, the forum in which the 12 eurozone finance ministers meet.
He proposed turning it into a formal decision-making body with an elected president to rival the Ecofin council, which includes the finance ministers from all EU member states.
Behind the politicians' rhetoric lies a belief among the ministers that the ECB should listen more carefully to the views of governments that are battling with stagnation and high unemployment.
So far the ECB has fiercely guarded its independence. Economists yesterday said the latest comments would do little to sway the ECB.
- (Financial Times Service)
