February 6, 2009 / 6:06 PM / 11 years ago

Sarkozy jibes leave Czechs furious and British cool

PARIS (Reuters) - French President Nicolas Sarkozy angered the Czech Republic, which holds the EU presidency, and drew a frosty response from Britain on Friday over disparaging comments about two key European partners.

France's President Nicolas Sarkozy makes a point at the Elysee Palace in Paris in a video image taken from France2 television February 5, 2009. REUTERS/FRANCE2 TV/Handout

Sarkozy, who already ruffled feathers last month by conducting a rival Middle East mission to a Czech-led EU one, caused offence this time by telling French car firms to locate plants at home rather than countries like the Czech Republic.

And his jibe about British tax measures to combat the financial crisis achieving “absolutely nothing” struck a nerve that has had British officials privately fuming.

The Czech Chamber of Commerce accused Sarkozy of encouraging protectionism and undermining the European Union’s foundations with his call on Thursday for French car firms to return home.

“By this statement, the French president gave an indirect signal for the deconstruction of the European Union,” the organisation said in a statement.

Sarkozy, seeking to reassure French workers about the government’s response to the economic crisis, had said he expected French carmakers benefiting from state aid to keep production at home.

“Setting up a Renault factory in India to sell Renaults to Indians is justified,” he said. “But when a manufacturer, I won’t say any names, sets up a factory in the Czech Republic to sell cars to French people, that’s unjustified.”

Sarkozy gave no details, but PSA Peugeot-Citroen has a joint plant with Toyota in the Czech Republic, making small passenger cars.

Czech Prime Minister Mirek Topolanek made clear his displeasure saying in a statement: “I do not understand the argument that it is unjustifiable to manufacture cars for the French market in the Czech Republic.”

“ABSOLUTELY NOTHING”

“As President of the European Council, I have more serious doubts about political involvement in the management of commercial companies and breach of the rules of free competition,” he said.

Sarkozy, who handed over the rotating EU presidency to the Czech Republic in January after a frantic spell of crisis management while France held the chair in 2008, was hardly effusive in his praise for Prague.

When an interviewer seemed to suggest that the Czech Republic was not a strong or visible EU president, Sarkozy merely replied: “They are doing what they can.”

He was even more openly dismissive of British policy, which he said had achieved “absolutely nothing” by lowering value added tax to spur consumer spending.

“If the English have done that it’s also because the English don’t have any industry any more — unlike France.”

A spokesman for Prime Minister Gordon Brown gave a cool response to questions about the remark at a regular briefing with reporters on Friday.

“The Elysee have been in contact this morning to assure us that these remarks were not meant as a critique of UK economic policy — which is nice.”

He declined to say which side had made the call and, pressed to explain how the words could not be taken as criticism, he said he would leave it to the French president’s office, the Elysee palace, to explain.

Additional reporting by Jan Lopatka in Prague, Sumeet Desai in London and Crispian Balmer in Paris; Editing by Dominic Evans

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