EU-DIGEST

Sarkozy Wants to Lead Euro Zone Until 2010

French President Nicolas Sarkozy reportedly said he wants to become president of the euro zone countries once his term as EU heads expires at the end of the year.According to the French daily Le Monde on Wednesday, Oct. 22, several advisors to the French president have confirmed this strategy. Sarkozy's ambition is based on his firm conviction that the crisis in Georgia and the financial crisis both demonstrated that Europe was in need of a strong leader. According to Le Monde, Sarkozy believes that without such an individual at the helm, the EU would never have been able to negotiate with Moscow or decide on an effective plan to rescue European banks. However, it seems unlikely that other EU countries will go along with the idea. In an interview published Wednesday in the French business daily La Tribune, German Finance Minister Michael Glos said the proposal of a single economic governance of euro zone countries was "not suitable for resolving the current problems."

Note EU-Digest: "the idea certainly has merit, or at least a compromise of the idea, whereby the 15 euro-zone leaders elect a Chairman to speak on behalf of the group".

Labels: EU, France, Sarkozy

Europe matters once again, thanks to its impatient, competent, and hyperactive leader - by Lara Marlowe

CAN NICOLAS Sarkozy save the world? In just two months, with his stewardship of crises in the Caucasus and on world financial markets, the French president has attained the image of an international statesman of rare ability. Mr Sarkozy is changing the way the world sees Europe, and the way Europe sees itself. "All has to change," he said at the closing of the EU summit here yesterday. "This [financial] crisis has given us the opportunity to reconcile Europeans with Europe. I'm ready to place a bet: Europe will have a better image after the crisis." Mr Sarkozy called the euro group's emergency summit on Sunday, then on Wednesday persuaded all 27 member states to adopt the bank rescue plan. His next mission - one he has talked about for years - is to "refound capitalism" the world over; nothing less.

Labels: EU, France, Sarkozy

EU takes historic step and seizes the initiative for the construction of a new and fair world economic order

This Thursday, the 27 member European Union leaders will call for a supervising body to oversee the world's 30 largest financial companies, among other sweeping changes to the global economic order. This was disclosed today as the EU political leadership began a two-day meeting to consider further steps to tame the global financial crisis, and will agree to expand a rapid action plan the U.K. and 15 euro-zone countries drew up Sunday to other countries in the bloc.

With the U.S. temporarily hobbled by the approaching election, the majority of E.U. politicians see a once-in-a-generation opportunity to seize the initiative, and play a major role in the construction of a badly needed new and fair economic order. Drawing heavily on proposals made earlier in the week by U.K. Prime Minister Gordon Brown, the leaders will call for the overhaul of the Bretton Woods system, an outdated US designed global financial framework which has existed since 1944.

The Europeans want to hold a meeting of leaders from around the globe to get the process underway after the U.S. presidential election. "I've proposed an international summit by the end of the year, preferably in New York, where all these problems started," French President Nicolas Sarkozy said in his opening address to the meeting. France holds the rotating presidency of the EU for the six months ending December, and Sarkozy is chairing the meeting of leaders. Sarkozy added that he wants to see financial supervision extended to hedge funds, and to eliminate offshore financial centers.

Long derided for its lack of maneuverability, the E.U. has surprised observers by responding decisively and coherently to the sharp declines in share prices that accompanied rising fears about the viability of the bloc's banking system in recent weeks.

Labels: Brown, Economic World Order, EU, Financial Crises, Sarkozy

SARKOZY BLAMES 'CRAZY SYSTEM' - by Steven Edwards

French President Nicolas Sarkozy issued a virtual indictment of the capitalist system yesterday in a hard-hitting speech on the opening day of the United Nations summit. Mr. Sarkozy said he wanted world leaders to hold a summit by year's end to "rebuild together a regulated capitalism." Central to the new mechanism, he said, would be measures ensuring that "those who jeopardize people's savings are punished."

Labels: EU, Sarkozy, US Economic Meltdown

Sarkozy Deserts Bush, Europe Drifting From America

When Nicolas Sarkozy was elected President of France, it appeared that for the first time a French President was going to play a second fiddle to President Bush. He gave the impression that he was also a staunch rightist who was bent upon reversing the liberal and leftist traditions of France and tows the neo conservative and reactionary policies of President Bush. However, the recent developments in Europe and the Middle East show that Sarkozy has parted company with Bush.

What made Sarkozy change his policies? Europe is fundamentally different than the United States. America remains the only country in the world that is loyal to the pure and unadulterated consumerist capitalism. Europe has long back deserted the traditional capitalism and has adopted the concept of a social welfare state based upon what can be called utilitarian capitalism. This form of capitalism can also be called “Capitalism with a human face”.

The poor performance of the American consumerist capitalism as compared to the European utilitarian capitalism has convinced Europe that it is on the right track. Failure of the American policies in Iraq, Afghanistan, North Korea and Iran as well as the deepening economic crisis at home has convinced the Europeans that time has come to put a distance between America and Europe. The resurgence of Russia as a global power and the relative decline of the American power has also led the Europeans to review their relations with Russia and America and adopt a more balanced and independent stand in the conflict between the two countries.

Labels: Bush, EU, France, Sarkozy

Sarkozy Says Iran May Provoke Israeli Attack, Causing Disaster - by Francois de Beaupuy

French President Nicolas Sarkozy said Iran's nuclear program may provoke an attack by Israel, urging the Islamic republic to accept international inspections. ``Iran is taking a major risk in continuing its process of obtaining nuclear weapons, which we are certain is happening,'' Sarkozy said today in Damascus, Syria. ``One day, whatever the Israeli government is, we can imagine ourselves one morning with an Israel that would have attacked. That would be a disaster.''

Labels: EU, Iran, Israel, Sarkozy

Sarkozy accused of hypocrisy as his wife meets the Dalai Lama - by John Lichfield

The French First Lady, Carla Bruni-Sarkozy, will meet the Dalai Lama in France this week – adopting for the first time her self-proclaimed role as a kind of queen of human rights. Officially, Mme Bruni-Sarkozy will meet the Buddhist spiritual leader as a man of faith, not as as a symbol of Tibetan resistance to Chinese rule. In truth, her role will be more ambiguous and more political, deflecting criticism from her husband, President Nicolas Sarkozy, who announced last week that he would not "provoke" the Chinese government by meeting the Dalai Lama while the Olympic Games were in progress in Beijing.

The French media have, almost universally, interpreted the deployment of the First Lady to greet the Tibetan leader as a clumsy attempt to combine realpolitik and principle.

The centre-left newspaper Libération said: "To human rights activists [the President] is saying 'Carla'. To the Chinese, he is saying: "here I come'." The first secretary of the Socialist Party, François Hollande, said: "Nicolas Sarkozy has already won the gold medal for hypocrisy." Elysée officials said that the decision was made at the suggestion of the Dalai Lama himself, who advised Paris that it was "better not to annoy the Chinese during the Olympics".

Labels: EU, France, Sarkozy, Tibet

France - Bruni wants a child with Nicolas Sarkozy

Just days after the release of her new music album in which she sings of her love for Nicolas Sarkozy, Carla Bruni [Images] has expressed her desire of having a baby with the flamboyant French president. "I'd love to have children with Nicolas. I hope to, if I am young enough. It would be a dream," Bruni, who already has a child from her first marriage, said in an interview to Vanity Fair magazine at Elysee Palace in Paris. However, the 40-year-old former Italian supermodel-turned-singer has ruled out fertility programs. "If it comes, I'd be the happiest person in the world, but if it doesn't come, I'm not going to tempt the Devil. If life doesn't give me another child, well, it has given me so much already," Bruni said.

Labels: Bruni, EU, France, Sarkozy

Sarkozy says will not sign WTO deal as it stands

French President Nicolas Sarkozy said on Thursday he would not sign the current version of a global trade deal unless it was modified.Talks to salvage a global trade deal faced a crunch point on Thursday after three days of scant progress and officials said it would be clear soon whether it was worth pressing on.

Labels: EU, France, Sarkozy, WTO

Sarkozy says EU Treaty Needs No Renegotiation - by Helene Fouquet

French President Nicolas Sarkozy said the Lisbon Treaty to overhaul European Union institutions should not be renegotiated after Irish voters rejected the treaty, the Irish Times newspaper reported today, citing an interview. Sarkozy, who holds the rotating presidency of the EU, will visit Ireland on July 21. He said Europe must resolve the crisis ``several months'' before the June EU parliamentary elections and the Commission's renewal later next year, the newspaper said.

Europe needs Ireland and Ireland needs Europe, Sarkozy told the newspaper. The French leader said the EU's executive arm, the Commission, under the Lisbon Treaty, could keep one commissioner for each of the 27 member states until at least 2014 and that this could be discussed as a solution with Ireland, the newspaper said. He said the EU common defense plan would not threaten the Irish neutrality, the Irish Times reported.

Labels: EU, Lisbon Treaty, Sarkozy

The United States cautiously welcomed on Monday the summit of European Union (EU) and Mediterranean countries, which also brought together top leaders of Israel, the Palestinian authorities, Syria and Lebanon. "We don't have an observer there. We don't have a place at the table. But I think, generally, it's an effort that we can, at the least, be supportive of," State Department spokesman Sean McCormack told reporters. Leaders from all the 27 EU member states and 16 North African, Middle East and Western Balkan countries launched in Paris, France, the Union for the Mediterranean on Sunday, aimed at boosting cooperation between Europe, North Africa and the Middle East through a series of regional projects.

The delegates approved six cooperation projects: the de-pollution of the Mediterranean, the building of maritime and coastal land highways, the fight against disasters, a solar energy program, an EU-Mediterranean university and a business development initiative.

Labels: EU, France, Mediterranean summit, Sarkozy

EU- Mediterranean realism triumphs - by Marwan Bishara

The dream of Nicolas Sarkozy, the French president, to establish a union between Europe and its southern neighbours has finally seen the light, albeit in a somewhat deflated project. The July 13 summit of 40 leaders from the Mediterranean region in Paris was a major symbolic and diplomatic victory for French foreign policy which had long been thought to suffer from stagnation and paralysis. France managed to create a process of dialogue and cooperation during the summit despite the past European failure of adopting a single constitution and the breakdown of the Barcelona process, which by 2005 was meant to have created a north-south Mediterranean rapprochment, but was instead considered all but dead.

Moreover, the failure of America's New Middle East project to produce any tangible results beyond chaos and war, prompted even Washington's closest allies to come together under French auspices and embrace a union that demanded little of their governments.

Labels: EU, Mediterranean summit, Sarkozy

EU plan for grand union - by Lorne Cook

French President Nicolas Sarkozy and 42 other leaders were to launch last night a union between Europe and its Mediterranean neighbors but tensions among Middle East countries could undermine their grand plan. Heads of state and government from the 27 European Union nations and an arc of countries running from Morocco to the Balkans representing some 756 million people were expected to endorse the new forum at the Grand Palais on Paris's Champs Elysee."

Labels: Air France, EU, Grand Union, Mediterranean region, Sarkozy

US, France clash over G8 expansion

The United States and France clashed Monday over plans to accommodate India, China and other large developing countries into the Group of Eight (G8) of industrialized countries, according to Japanese media reports quoting officials from both sides.In an interview given to Japan's Yomiuri Shimbun newspaper prior to his departure for Japan, French President Nicolas Sarkozy said G8 annual summits should also include China, India, Brazil, Mexico and South Africa.

Labels: Air France, Council of Europe, G8, Russia; US, Sarkozy

Sarkozy calls for changing the way Europe is being built

President Nicolas Sarkozy on Monday called for a profound change to the way Europe is being built as France prepared to take the helm of the European Union. "There have been errors in the way that Europe has been built," Sarkozy said in a television interview as France was to take over the presidency of the 27-nation bloc starting on Tuesday. "We must therefore profoundly change our way of building Europe," he said.France wants to push issues it says Europeans find relevant: taking steps to stem the influx of illegal immigrants and asylum seekers; assuaging fears that jobs are being lost to globalization and emerging powers like China; softening the blow of high oil prices on fishermen, farmers, truckers, and low-income households.

France's presidency will, a senior diplomat told me recently, be "fun". That is not a word used often to describe EU presidencies.

Labels: EU, France, Sarkozy

France's Nicolas and Carla assume Europe's throne - by Angela Charlton

France's first lady sings in English and dreams in Italian, and the president's roots reach to Hungary and Greece. Nicolas Sarkozy and Carla Bruni-Sarkozy could be a metaphor for a harmonious, borderless Europe. The real Europe is a cacophonous and conflicted place, though, as the Sarkozys will soon discover: On Tuesday, they become the continent's public face, as France takes over the presidency of the 27-nation European Union. It's an unusual, important job, presiding over a bloc that boasts nearly half a billion people and an economy rivaling America's yet that struggles to manage its financial and diplomatic heft.

"Modesty" and "no arrogance" — Sarkozy's aides say these are the watchwords of the French EU presidency. Skeptics question whether the glamorous and wealthy Sarkozys can pull that off.

Labels: EU, France, Sarkozy

Sarkozy is making enemies when he should really be making friends

Making enemies might seem a strange way to launch a presidency. But Nicolas Sarkozy just cannot help it, it seems. In the run-up to the start of France's six-month leadership of the European Union, kicking off next Tuesday, a steady stream of venom is pouring Brussels's way from Paris. The two main targets are Jose Manuel Barroso, the ex-Portuguese prime minister who heads a liberal commission, and Peter Mandelson, former New Labour brain and now powerful trade commissioner. The rhetorical knives are out.

Labels: EU, France, Sarkozy

Labels: EU, France, Israel, Sarkozy

Labels: EU, France, Military, Sarkozy

Sarkozy seeks to reassure disgruntled

President Nicolas Sarkozy, looking to rebuild his shattered popularity ratings, promised on Tuesday to preserve France's 35-hour work week and cushion the impact of soaring energy costs for the hardest hit. In a dawn media blitz, Sarkozy visited France's biggest food market and then went on breakfast radio to reassure people that he understood their concerns over rising prices. The president ruled out any budget austerity, laid to rest fears his government might hike the retirement age and denied rumours of a possible increase in the television licence fee. "I don't believe in austerity ... What did austerity measures bring (in the past)? Higher unemployment, higher deficit and less growth," Sarkozy told RTL radio. Sarkozy's ratings have hit record lows for a president one year into office, with voters angry about the rising cost of living and disenchanted with a ceaseless churn of reforms.

Labels: EU, France, Sarkozy

France's Club Med Plan Riddled With Problems

President Nicolas Sarkozy's controversial plan for a Mediterranean Union, expected to be a cornerstone of France's looming EU presidency, is in trouble with experts saying many questions still need to be resolved. Last year French President Nicolas Sarkozy had a vision for an exclusive “Club Med,” in which membership was based solely on a shared Mediterranean coastline. This meant that only EU countries on the 27-nation bloc’s southern flank, such as France, Spain and Italy met the criteria for a geographical grouping that stretches from Morocco to Israel, Syria and Turkey. Sarkozy’s “Mediterranean dream” was supposed to provide a forum for tackling regional issues that ranged from stopping illegal boat migration from Africa and combating terrorism to harnessing solar energy and cleaning up the polluted sea.

But there were numerous problems with the proposal, with Germany playing a key role in torpedoing Sarkozy’s original plan, say EU experts. German chancellor Angela Merkel had insisted that the initiative be anchored within existing EU structures and must include all member states.

It is unclear whether France's enthusiasm for the project will be shared by other EU members.

Labels: EU, France, Mediterranean region, Sarkozy

For the complete report from AFP click on this linl

Russia and EU - The dream team: Putin heads to France as foreign policy master

Vladimir Putin heads to France Thursday on his first major foreign visit since becoming prime minister, as he continues to wield influence in foreign policy, overshadowing that of his Kremlin successor. In a sign of his powerful role, Putin has been invited to dinner by French President Nicolas Sarkozy on Thursday after his meeting with French Prime Minister Francois Fillon -- a rare honour for visiting heads of government. Putin spokesman Dmitry Peskov said France was chosen as his first major foreign destination because of its presidency of the European Union later this year. Putin visited Russia neighbour Belarus on a brief trip last week. In a stroke of good timing, EU member states on Monday approved the launch of negotiations with Moscow on a new partnership and cooperation agreement, putting an end to two years of crisis in EU-Russia relations.

Labels: EU, France, Russia, Sarkozy

Labels: EU, France, Sarkozy

Unpopular Sarkozy defends his presidency

In a live televised interview French President Nicolas Sarkozy on Thursday tried to reverse his unpopularity in opinion polls. While admitting making mistakes during his first 12 months in office, he defended his record and pledged further reforms: "Since I was elected President of the Republic the price per barrel of oil has doubled, there's been the subprime crisis, the euro has hit unbelievable levels, or rather the dollar has fallen to very low levels, and there's been a sharp rise in other raw materials.This quadruple shock means we need reforms,change and adaptation," he said. Answering questions by French journalists Sarkozy reiterated his opposition to Turkey becoming a member of the European Union, because that country is not in Europe, he said. His predecessor Jacques Chirac wanted an automatic referendum on any new country seeking membership. Sarkozy said he doesn't want the referendum to be something automatic, but if the issue is raised during his mandate, he will organize a referendum on Turkey.

Labels: EU, Sarkozy

French President Sarkozy wants bigger 'green' economy - by Angela Charlton

French President Nicolas Sarkozy said Friday the fight against climate change needs massive new amounts of private investment and globally regulated "green" markets to succeed. About 90 percent of the money for fighting global warming will come from the private sector over the long term, Sarkozy said at climate talks in Paris with the world's biggest polluters. Mobilizing a few hundred million euros, or dollars, is not enough, he said, adding that the international community must "massively redirect financial flows toward this new low-carbon economy." The U.S.-sponsored talks in Paris this week are aimed at ironing out disagreements among leading economies such as the United States, the European Union, China and India over how to reduce global warming. They are meant to feed broader U.N. efforts to work out a follow-up plan to the 1997 Kyoto Protocol, which requires signatories to reduce emissions of heat-trapping gases that contribute to global warming.

Sarkozy also said the carbon credit market and other environmental financial tools currently used in Europe should be "globalized and regulated." Karsner, however, said he saw little need for a globalized carbon market.

Labels: EU, France, Sarkozy

France's Sarkozy tells feuding ministers to stop it

French President Nicolas Sarkozy has told his ministers to stick together, in an effort to end infighting that has dented government credibility at a time of low popularity ratings for Sarkozy. The ruling conservative UMP party is trying to recover from a poor showing in last month's municipal elections - partly blamed on Sarkozy's personal popularity slump - but the task has been complicated by ministers arguing in public. "The president, at the end of the cabinet meeting, called on all members of the government to be loyal, to show solidarity and to form a united team around him and the prime minister," government spokesman Luc Chatel told a news conference.

In the early days of his administration, the hyperactive Sarkozy was markedly more popular than his more discreet prime minister. But the latest poll, published on Sunday, showed 38 percent of those surveyed were satisfied with Sarkozy while Fillon's approval rating stood at 51 per cent.

Labels: EU, France, Sarkozy

Could the Bucharest NATO Summit Give Birth to an EU Army? - by Gulfstreamblues

When it comes to great expectations, few summits could be said to be generating as much anticipation recently as the NATO summit in Bucharest this week. Besides hammering out a plan to rescue the military fiasco in Afghanistan, it is set to enlarge and restructure the alliance in a way that will fundamentally change it. All indications seem to suggest that Sarkozy will push this issue hard at the NATO summit, and that the meeting could end with not only new members and a redefined mission in Afghanistan but also with a specific NATO and US blessing for an EU army, starting with the EU policing project in Kosovo. Ironically, the most important thing to come out of this meeting may be the birth of an entirely different organization that could one day replace.

Labels: EU, European Army, Kosovo, Nato, Sarkozy

For the complete report from Reuters.com click on this link

Prospect of French NATO return tilts power balance - by Paul Taylor

The prospect of France returning to NATO's military command after more than four decades of estrangement is tilting the balance of transatlantic relations. The United States is courting France as a new partner in leadership, overshadowing Britain and Germany, diplomats and analysts say, even though President Nicolas Sarkozy is likely to skirt the reintegration issue at this week's Bucharest summit of the 26-nation alliance. Sarkozy announced last year that Paris was willing to return to the military structure from which General Charles de Gaulle withdrew it abruptly in 1966, provided the European Union first made progress on a common defense capability.

The new president has taken a risk at home, since much of the political establishment is wedded to the notion of an independent French or European foreign policy and hostile to any hint of subservience to the United States.

Labels: EU, France, Nato, Sarkozy, US

Bruni and Sarkozy disarm the British in cross-Channel charm offensive - Mark Rice-Oxly

They have perhaps the longest international rivalry in the history of the nation state, a mutual disdain rooted in generations of medieval war, decades of imperialistic antagonism and a cultural dissonance that persists to this day. But are Britain and France about to kiss and make up?"Sarkozy wants to close the chapter of Gaullism," MacShane adds. "Mitterand and [former French President Jacques] Chirac always kept the British at a distance." Newspapers returned Mr. Sarkozy's compliments with interest. Tabloids swooned at his supermodel wife, Carla Bruni Sarkozy, who cut a classy, demure figure at a royal banquet on Wednesday night, inviting comparison, albeit perhaps hyperbolic, to Jackie Kennedy and Princess Diana. At the heart of his appeal was a call for Britain to become more closely engaged with the EU. Britain may be a more European country these days, but political discourse is still dominated by Euroskeptics unconvinced by the case for closer affinity with the 27-nation bloc. "The political class in France and Germany assumes that the other is their first partner in Europe," he says. "The political class in Westminster certainly doesn't assume that. It assumes that its first partner is the US, and still has quite a lot of reservations about Europe." Brits would, he adds, be misguided if they thought Sarkozy's offer was about replacing France's long-term partner Germany with a new paramour. "It would be very foolish to understand that it's us instead of Germany," he says, "it's us as well as Germany. A ménage à trois."

Labels: Britain, Bruni, EU, France, Sarkozy

Anyone who discounts Nicolas Sarkozy as a lame-duck president is missing the point - Anne-Elisabeth Moutet

"Sarkozy sinks even further!" was the headline in Le Canard Enchaîné, France's Left-wing answer to Private Eye, as the French president launched a new nuclear submarine at Cherbourg last week.Nicolas Sarkozy, who is beginning a two-day state visit to Britain on Wednesday - three months before France assumes the European Union's rotating presidency - will arrive weighed down by a controversial image and baggage as heavy as the gold Rolex watch which he has only recently been persuaded to give up. Fellow European leaders consider, with feelings ranging from fascination to dismay, his precipitous slide in the opinion polls of more than 30 points in less than three months; his party's poor performance in last week's local elections, and the cloud of high-octane gossip that has surrounded his very public divorce and his new marriage, to the model and singer Carla Bruni.

Labels: Britain, EU, France, Sarkozy

Europe idle as US battles meltdown - by Ambrose Evans - Pritchard

It is the first time since the Great Depression that the US Fed has stepped in directly to absorb credit losses, crossing a line deemed unthinkable just months ago. The dramatic late-night move on Sunday required dredging up Article 13 (3) of the Federal Reserve Act, which allows the Fed to shower money on almost anybody it wishes by a vote of five governors in "unusual and exigent circumstances".Jean-Michel Six, chief Europe economist at Standard & Poor's, said the Europeans were in no mood to rescue America. "There is monetary war going on. The ECB view is that Fed is a victim of its own mistakes and should pay for its past crimes. Frankly, they don't see why they should be cutting rates when inflation (3.3pc) is accelerating," he said.

There are now echoes of October 1987 when the German Bundesbank (and therefore Europe) refused to ease monetary policy, even though the dollar was in freefall and Wall Street was fragile. The spat was the backdrop to the Black Monday crash.

Note EU-Digest: The ECB is on the right track, the problems of the US economy are of the US her own making. If the ECB cuts the interest rates in Europe, inflation would rise and Europe's economy would also spiral into disaster.

Labels: Britain, Christianity, Energy, EU, EU Economy, euro, France, Gas Supplies, Healthcare, Iraq war, Islam, Italy, Romance, Russia, Sarkozy, Sex Appeal, Turkey, US, US Economy

Sarkozy's party suffers losses in local elections

French President Nicolas Sarkozy's right-wing party suffered considerable losses in local elections that concluded Sunday, as the opposition Socialists won several major cities including Paris. The first round of the vote was conducted on March 9, with Sunday's being the second or final round.The left-wing Socialist Party gained control of Paris, the country's third largest city Lyon, as well as Strasbourg and Toulouse. However, Sarkozy's Union for a Popular Movement (UMP) won the second largest city Marseille to save itself from complete humiliation in the nationwide vote. The elections were widely regarded as the first major test of popularity for Sarkozy, who defeated Socialist Segolene Royal in last May's presidential elections.

Labels: EU, France, Sarkozy

Germany pours cold water on Sarkozy union - by Ian Traynor

President Nicolas Sarkozy was last night forced to back away from an ambitious scheme to launch a French-led "Mediterranean Union" linking the EU's southern states in a political club with the Maghreb, Turkey and Middle Eastern countries including Israel. Sarkozy had planned to launch the bold new union when France took over the presidency of the EU in July, but climbed down after fierce opposition from Angela Merkel, the German chancellor. At an EU summit in Brussels last night, Sarkozy and Merkel jointly proposed a much looser grouping, to be initiated at a summit of EU and Mediterranean countries in Paris in July. Worried that the Sarkozy scheme would split the EU while leaving the wealthier countries of Germany and Scandinavia footing the bill for an exercise in French aggrandisement, Merkel was said to have threatened to boycott the Paris summit unless Sarkozy scaled back his plans.

Labels: EU, Europe, Mediterranean region, Merkel, Sarkozy

Dutch listed affiliate Carlyle may face cashflow trouble : by Alexandra Hudson

Private equity firm Carlyle Group's Dutch-listed affiliate said on Friday it may face cashflow problems after it received substantial additional margin calls and default notices. "In the past several days there has been a rapid and severe deterioration in the market for U.S. government agency AAA-rated residential mortgage-backed securities," Carlyle Capital Corporation (CCC) said. CCC had said earlier it received margin calls totaling more than $37 million on Wednesday and expected at least one more default notice. The Dutch market regulator (AFM) suspended trading in CCC after its shares closed on Thursday at $5, having lost more than half their value. Carlyle Group has a $150 million exposure to CCC through a credit facility.

Washington DC based The Carlyle Group has more than $75 billion under management and has attracted a string of high-profile advisers including President George Bush in the early 1990s and former British Prime Minister John Major. This week it said it had hired Olivier Sarkozy, half-brother of French President Nicolas Sarkozy, from investment bank UBS as it looks to "capitalize on the dislocation in the financial services sector."

Labels: Carlyle, EU, Sarkozy, The Netherlands, US housing market

Municipal French Elections Appear to Rebuke Sarkozy - Molly Moore and Corinne Gavard

Preliminary voting returns and exit polls indicated that Socialist candidates were outpolling members of Sarkozy's ruling Union for a Popular Movement for mayoral seats in key towns and were easily maintaining their power bases in Paris and Lyon, the country's third-largest city. Nine months after his inauguration as president, Sarkozy has become such a liability to his own party that most candidates from his party shunned his support in their campaigns and some stripped the governing party's labels from their Internet sites and campaign literature. Socialist leader Francois Hollande said voters Sunday sent "a warning to the president of the republic and the government on the policies conducted over the past nine months."

Labels: Elections, France, Sarkozy

Don't play politics with the euro - and don't follow US example of reducing interest rates or listen to France

For anyone seduced by French complaints over an overvalued euro, and the need for the European Central Bank (ECB) to concentrate more on pursuing growth, the lesson is plain.

If you ignore the post-1945 German focus on fighting inflation and pour in easy money, then disaster follows. Note EU-Digest: All you have to do is look at the US economic policies so greatly admired by Mr. Sarkozy. Without tight monetary controls and economic discipline the greed of the corporations takes full control and the stock-market becomes a casino.

Labels: EU, euro, Sarkozy

Sarkozy, Merkel Find Compromise Over Mediterranean Union Spat - by Bryan Parkin and Francois De Beaupuy

French President Nicolas Sarkozy and Chancellor Angela Merkel said they resolved a policy spat over a plan to set up a Mediterranean Union that strained a traditional show of Franco-German unity ahead of a European Union summit. Sarkozy and Merkel said after talks late yesterday in Hannover, Germany, that a French initiative to improve cooperation between the north and south Mediterranean seaboards would not be an exclusive club but open to all 27 states of the EU. Merkel has criticized Sarkozy's initiative, indicating that exclusivity may hurt Franco-German ties in the 27-state trade bloc.

``We've made efforts to reach out toward each other - that's the rule of the game on European matters,'' Sarkozy told reporters after the 90-minute talks with the German leader. ``In coming days, you will see that we found a compromise on the Mediterranean Union that excludes nobody.''

Labels: EU, France, Germany, Merkel, Sarkozy

Sarkozy and Mandelson 'strike a deal to get top EU job for Blair' - Simon Walters

Nicolas Sarkozy is backing Tony Blair's campaign to become the first President of Europe in return for the way Peter Mandelson secretly helped him win the French Presidency, it was claimed last night. The suggestion of a secret EU Presidency deal between the three men will enrage Gordon Brown, who has always blamed Mr Mandelson for the way Mr Blair pipped him to the post of Labour leader in 1994. A senior member of Mr Sarkozy's inner circle claims the French President regards his support for Mr Blair's bid to become Europe's first fully fledged political leader as a "quid pro quo" for EU Commissioner Mr Mandelson's help in winning last year's election.

Note EU-Digest: Please spare us Europeans to get Tony Blair, George Bush his loyal friend and co-conspirator of the Iraq war disaster, as our EU president. A better suggestion would be that instead of Blair coming to Europe, Sarkozy should go and live in Britain. France and Europe would probably be greatly relieved. As to the British, lets face it, they don't feel part of the EU anyway. They only want to enjoy the benefits without any commitments on their side. With friends like this who needs enemies.

Labels: EU, Mandelson, Sarkozy, Tony Blair