Sarkozy Denies EU Is Planning to Block French Bank Rescue Plan

By Sandrine Rastello and Ladka Bauerova

Nov. 29 (Bloomberg) -- French President Nicolas Sarkozy denied that the European Commission plans to block France’s 10.5 billion-euro ($13 billion) bank rescue plan, saying the two sides are still in negotiations.

The EU is “absolutely not” blocking France’s effort to inject funds into its six main banks, Sarkozy told reporters during a visit to Doha, Qatar today. “I don’t think there is such a will from any commissioner,” he said.

The president was responding to a Financial Times report, published yesterday, which said the Brussels-based European Commission would veto France’s rescue plan unless the banks reduced lending. The French government is pushing the banks to boost loans by 3 to 4 percent in exchange for the aid.

“The world has changed,” Sarkozy said. “We must move fast” to bolster the economy, he added.

A spokesman for the European Commission said the two sides are in close contact and are seeking to reach an agreement as soon as possible.

French government officials are scheduled to meet the European Commission on Dec. 4. The two sides are “in constant contact” and will continue to fine-tune the proposal until the last moment, French Finance Ministry spokesman Bruno Silvestre said today when reached by telephone.

To contact the reporter on this story: Ladka Bauerova in Paris at lbauerova@bloomberg.net. Sandrine Rastello in Qatar at srastello@bloomberg.net.