Downing Street Says » President Sarkozy

Asked what the Prime Minister s reaction was to the comments made by President Sarkozy, the Prime Minister s Spokesman (PMS) told the assembled press that the Elysee had been in contact this morning to assure us that these remarks were not meant as a critique of UK economic policy.

On the specifics of this, we had set out quite clearly the case for, for example, the VAT cut and all along we had made it clear that other countries must decide what measures are appropriate for their own economic circumstances. The important thing was that we coordinated those responses. The PMS added that as he understood it, President Sarkozy in the course of the debate, was being asked why he wouldn t implement a similar cut in VAT.

Put that it was hard to see how the comments were not a criticism of UK policy, the PMS replied that he would leave the Elysee to explain how that was not a criticism. The point on VAT was that we had said all along that it would run for 13 months, so it was too early to judge the affects that it had had.

However, if people looked at for example, the IFS Green Budget, it stated that those dismissing the VAT cut as a failure ignored the likelihood that things would have been even worse without it. It also expected the temporary VAT cut to increase purchases in 2009 by around 1.2% and that this policy change was likely to be a reasonably effective economic stimulant.

Asked if it was a personal call from President Sarkozy, the PMS said that it was a call between staff at No10 and at the Elysee. Asked who actually made the call, the PMS replied that he would not get into a blow-by-blow account of it.

Put that even if the French had said it wasn t meant as a critique, was it taken as one, the PMS replied that we had said all along that other countries had got to do what was in the interests of their economy, according to their circumstances and we would do what we thought was right for the British economy. What was important was that we coordinated the action that we took and that was what we had been doing with France and other EU countries for some time.

Asked if there was a danger that the French President was sending a signal to other countries that the UK plan was not the way forward and therefore causing a headache for the Government before the G20, the PMS said it was important to remember the context in which the President was making the comments. It was a domestic debate on television about the way forward for the French economy and French proposals for an economic stimulus and it was important that people kept seeing it in that context.

Asked if the Government accepted what President Sarkozy had said in regards to consumption still continuing to fall, the PMS replied that we could argue about figures all day. We would bring forward our economic forecasts in the usual way.

Asked what the Prime Minister s reaction was to the remarks, the PMS said that we appreciated the context in which the President made those comments. It was a French political debate about France s future economic policy. We were quite clear on the case for the measures that we had taken.

Asked if the phone call was the first Downing Street had heard about the matter, the PMS replied that he had seen the reports last night. Asked when the phone call was, the PMS said that it had happened this morning. Put that it sounded like No10 had called the Elysee for clarification, the PMS said that he would not get into a blow-by-blow account of the phone call.

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» Friday, February 6, 2009

President Sarkozy

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