French minister defends debate over EU budget

French Finance Minister Mr Francis Mer has said European Monetary Affairs Commissioner Mr Pedro Solbes is free to form his own…

French Finance Minister Mr Francis Mer has said European Monetary Affairs Commissioner Mr Pedro Solbes is free to form his own opinion about the decision taken by ministers on German and French budget deficits.

"Mister Solbes is free to think as he likes, me too . . . that's called a democratic debate," Mr Mer told reporters at a briefing.

Mr Solbes has said he deeply regretted the decision taken by European ministers, which effectively froze EU budget rules.

"This morning we voted," Mr Mer added. "We started by voting to see whether a vote was needed. Then we voted on the Commission's proposals . . . [which] didn't get the required majority. So then we
voted with a qualified majority for the council's proposals - if that's not a legal basis, where is the law?"

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"The Commission does not have a monopoly on thinking."

Asked about the impact on foreign exchange markets from the deal, Mr Mer said: "The euro is a strong currency. The market will draw the conclusion that Europe . . . continues to function." He added: "The euro is for the moment strong in relation to the dollar."

Mr Mer said he did not expect the European Central Bank to take reprisals after the deficit deal, which effectively suspended the EU's budget rulebook to save giants Germany and France from
disciplinary action over their excessive deficits.

Mr Mer welcomed the disputed deficit deal. "I believe that the situation we are in today is positive for Europe," he said, adding the accord respects the spirit of the EU's Stability and Growth Pact on fiscal discipline.