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France denies it seeking euro zone crisis meeting

Published 01/31/2009, 09:21 AM
Updated 01/31/2009, 09:24 AM

PARIS, Jan 31 (Reuters) - French President Nicolas Sarkozy's office denied on Saturday a newspaper report that said he wanted to hold an emergency meeting of euro zone leaders to discuss market strains caused by the economic crisis.

"No. That's not on the agenda," a French presidency spokesman said when asked about the report in Le Monde.

The influential French newspaper said on Saturday that Sarkozy was worried by growing bond spreads amongst euro zone member states and wanted a meeting to discuss "a minimum of budget rigour" to stave off any market crises.

"Paris worried by the fragility of the euro zone," the paper said in its front page headline.

The paper said Sarkozy told political allies at a meeting on Tuesday that he was worried about the vulnerability of certain euro zone countries, specifically mentioning Greece.

The premium investors demand for holding a range of non-German euro zone government bonds over benchmark Bunds have hit historic highs this month, with the Greek/German yield spread briefly rising above 300 basis points last week.

Le Monde said the Germans were "exasperated" that Sarkozy wanted to bring this issue to the fore, fearing it would only make matters worse.

France held the rotating EU presidency to the end of 2008 during which time the hyperactive Sarkozy summoned euro zone leaders to Paris to seek solutions to the financial crisis.

The Czech Republic took over the EU presidency at the start of the month and French officials have expressed disquiet in private that Prague has been too low key.

However, the Czech Republic has not signed up to the euro currency and Sarkozy indicated to allies that he wanted to act as the de facto euro zone president in the first half of 2009.

Le Monde said France was ready to see Germany host a meeting of euro zone leaders towards the end of February to dispel fears that Sarkozy was using the crisis to promote personal ambitions. (Writing by Crispian Balmer; editing by James Jukwey)

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