Interview: Top French economist slams 'dogmatic' EU[fr][de] 

• European Central Bank criticism

Attacks on the European Central Bank have been commonplace since the beginning of the presidential campaign in France and are one of the rare points of agreement between the two leading contenders Nicolas Sarkozy (UMP, centre-right) and Ségolène Royal (Socialists).

The criticism, centred on the ECB's perceived narrow focus on inflation and lack of consideration for economic growth and job creation, is endorsed by Jean-Paul Fitoussi.

"What Nicolas Sarkozy and Ségolène Royal are actually saying is that they wish the ECB to be made accountable before a political assembly as is the case in every country in the world, including the UK and the US," he told EurActiv in an interview.

"When monetary policy, which is the main power for a major economy, does not contribute to other political objectives, then there is a problem," Fitoussi argued.

In his view, the biggest obstacle towards increased accountability for the ECB is institutional in that it is difficult to win unanimity among the 27-country bloc to reform the ECB’s status.

But he says that obstacles are also political, with the EU increasingly developing a "tight-lipped" approach to economic policy. Separately, in a campaign e-book developed for the 2007 presidential elections, Fitoussi criticised a "religious vision of the economy " based exclusively on market forces.

• "Unco-operative" German policies

Asked how Germany could be performing better despite having the same currency, Fitoussi does not hesitate: France’s traditional ally, he says, has put in place "unco-operative policies" based on competitive cost cuts.

"In Germany, for example, salaries have decreased on average," Fitoussi points out, saying that increased flexibility in hiring and firing rules have also contributed. “Germany's export growth has happened essentially at the expense of other countries in the eurozone," he says, citing the Spanish, French and Italian trade deficit examples.

Deprived of traditional fiscal and budget policy levers, he says that governments have had no other choice than to compete on wages and taxation.

• European community for energy, environment and research

To overcome those challenges, Fitoussi says that a more political European integration is needed. He puts forward the idea of putting together a European Community for energy, environment and research on a model inspired by the European Coal and Steel Community (ECSC) of 1951 which put in place common strategic natural resources to avoid future wars.

This time, Fitoussi says, the idea would be "to put in common the geopolitical means of power" by building a Europe of environmental and energy technologies.

Asked about the recent summit agreement to drastically reduce greenhouse-gas emissions in Europe and boost the share of renewable energies to 20% of the EU’s total consumption, Fitoussi was doubtful.

"We have to stop setting ourselves ambitious objectives without instruments [to achieve them]. If Europe sets itself objectives but then counts on member states to achieve them, then this is a situation of paralysis."

And contrary to research, where he thinks a 'top-down' approach is not suitable, Fitoussi says it is "not at all the same" with energy and the environment. "It is a problem which implies so many externalities, which brings up so many sovereignty issues that it is obvious that politics cannot turn its back on it. And the 'top-down' approach is the best in this case. We cannot leave each and everybody free to reflect on the best way to produce energy and protect the environment."

• Energy: breaking up companies not the solution

Commenting on the Commission's energy liberalisation policy and announced plans to split up distribution and generation activities of large integrated groups, Fitoussi is adamant. 

"The [current] European political orientation in this field is too dogmatic and insufficiently pragmatic," he says. "Each time unbundling took place, it has generally led to an accelerated ageing of networks and to under-investment that have led to large blackouts in the United States and Canada a few years ago."

This, he continues, is because so-called ownership unbundling implies losses in information and, therefore, efficiency. "In principle, it is the operator who knows about demand and, therefore the need for investment," he says. If network maintenance and investment are separated from demand, then he believes there is "a major information problem" that can only be solved by "a massive presence of the state".

And fair access to network for new suppliers – an argument put forward by the Commission and supported by renewable energy suppliers - can be solved in other ways, he believes.

"We have passed the stage of economic theory. Capitalistic separation of the network and the operator is something that was recommended fifteen years ago but it does not seem to be a founding policy in the energy field."

To read the full interview (in French) please click here.