France kept up pressure on the European Central Bank this afternoon to take account of global financial market turmoil and economic growth when setting interest rates, and said a September rate rise was not a done deal.
President Nicolas Sarkozy was quoted by a government spokesman after a cabinet meeting as saying: "Can we deprive ourselves of the rate weapon in the face of a crisis like the current one?"
Separately, Economy Minister Christine Lagarde said she hoped the ECB would take the needs of European economies into account when it next decides rates on September 6th, and said an ECB increase was not guaranteed at this meeting.
"One should not consider that the European Central Bank has raised its interest rate," she told reporters on the sidelines of a press conference. "It is a decision that will be taken in due course on September 6th in light of macroeconomic elements and in light of the monetary policy it intends to implement."
The comments come at a time when some in financial markets have begun to believe that the ECB may intend to raise interest rates from 4 per cent in September despite recent sharp falls in share prices and tightening credit conditions.
Such speculation was sparked after the ECB reminded markets on Wednesday of the monetary policy stance it had taken on August 2nd, before the most recent bout of financial market turmoil.
Ms Lagarde sought to show that Paris was not seeking to challenge the ECB's fiercely-defended independence but pointed out that euro zone inflation, which the ECB is mandated to keep in check, currently posed no problems.
"It (the ECB) will do so in all independence and I hope with due consideration to the needs of our European economies and in particular the economies of the euro zone, where I note that inflation is well under control," she told reporters.