Eurogroup finance ministers and the European Commission will urge French president Nicolas Sarkozy to commit to real structural economic reforms when he outlines his budget plans to them on Monday, EU sources said.
The sources said they did not expect a confrontation with the new French leader, who has vowed to postpone balancing the budget to 2012 from the agreed EU date of 2010 to pursue growth-promoting measures.
But they said there would be pressure to be more specific about planned reforms, because some of the steps announced so far appeared to be tax breaks to please voter groups rather than genuine structural measures.
One well-placed source said ministers were likely to ask France to come back with more detailed plans in September, before it puts its 2008 budget to parliament in October.
A spokeswoman for EU economic and monetary affairs commissioner Joaquin Almunia confirmed yesterday that the European Commission had no legal power to make France change its budget plans.
"The commission cannot take France to court," she told a news briefing. An official of the Portuguese EU presidency also said it was a political discussion, not a legal issue.
France revealed yesterday that it wanted to reclaim the leadership of the International Monetary Fund and Poland said it could field a rival candidate as calls intensified for the abolition of Europe's monopoly of the job.
President Sarkozy planned to use a newspaper interview tomorrow to propose Dominique Strauss-Kahn, a Socialist former finance minister with solid political and economic credentials, to become the IMF's new managing director, a presidential palace source in Paris said. "France is trying to nominate Dominique Strauss-Kahn to this post. It would be a good thing for the institution but the nomination process continues to pose problems," World Bank chief economist François Bourguignon told reporters following an economic conference in southern France.
Poland said it would be prepared to back former central bank governor Leszek Balcerowicz as a candidate. He would be the first IMF chief from an emerging market country if he won. - ( Reuters )
