French prime minister seeking financial coordination in Washington
By DESMOND BUTLER | Associated Press | May 2, 08 12:00 AM CDT
As French President Nicholas Sarkozy struggles at home with efforts to reform the French economy, his prime minister, Francois Fillon, is seeking remedies in Washington for global financial instability.
Fillon was planning to discuss on Friday how to coordinate policy on exchange rates with U.S. officials including Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke, the U.S. central head.
While Sarkozy has seen a sharp downturn in public approval as his promises of reform have faltered, Fillon has remained relatively popular.
Fillon said ahead of his trip that he was uneasy about the weakness of the U.S. dollar and China's policy on the yuan. He was expected to ask the United States for help in pressuring China to let the yuan rise against the dollar and euro.
"We need a joint approach with the United States on exchange rates," Fillon told The New York Times in an interview Wednesday. "There is political pressure to be put on China, with more chance of success if we're united."
Global financial turbulence, an economic downturn in the United States and the fast rise of the euro in recent months has pinched France's economy by hampering exports.
The French government recently dropped its growth target for this year to between 1.7 percent and 2 percent, and estimated that the 2008 deficit will be larger than expected.
Sarkozy has been looking for ways to stimulate the economy, but his ability to do so is limited by sluggish growth that lowers tax receipts and boosts welfare spending. The economic woes have complicated Sarkozy's reform plans.
In his interview, Fillon said that he would seek clarification on how the United States plans to deal with its recent credit crunch and collapse of the housing market.
"Obviously it's easier to reform when there is little growth," he said. That is "why it's so important to us to know what the impact of the American crisis will be on our economy, to adjust our budget and the pace of reforms."
Fillon also plans to meet with former French finance minister Dominique Strauss-Kahn, who now heads the International Monetary Fund. France and other European countries have been calling for greater regulation of world financial markets and efforts to ease rising food prices.
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