'3 F's top French Presidency's economic agenda[fr] 

"We know that we are living through a great deal of instability and crisis," she said, stressing that it was time to consider measures to alleviate the crisis. 

Coordinated macroeconomic policies are one important tool, Lagarde said. But she reassured parliamentarians that France would not question the independent stance of the ECB in this area. Referring to President Nicolas Sarkozy's statement to the plenary last week, in which he questioned whether the recent ECB’s rate rise was reasonable, Lagarde said: "I don't think he ever wanted to in any way challenge the independence of the European Central Bank."

However, she commented that "it would be legitimate for member states to also have an opportunity to express their point of view; to have a dialogue with the ECB".

Asked whether she was worried about the euro's strength, Lagarde admitted that the euro was "very high", representing a double-edged sword for European businesses. "The higher the euro, the better our oil bill will be. That is one side of the coin. The other side of the coin is that our exporters, who base their costs in the euro zone, are clearly suffering from this imbalance." 

The minister stressed that the currency's strength is also to a large extent due to the ongoing instability of financial markets. The euro is "paying some of the cost of the much-needed balance that does not exist today," she said in reference to the large underevaluation of the Chinese currency and the weakness of the US dollar. 

Asked to specify which concrete measures France would push for during its tenure, she devoted particular attention to the Solvency II package proposed by the Commission in July 2007, which aims to fundamentally overhaul the EU insurance sector, particularly by modifying the delicate rules that prevent insurers from going bankrupt (EurActiv 07/03/08).

She said she was confident of overcoming the political divide between member states over a clause in the proposals which would radically change the supervision of cross-border insurers, expressing hope that the package may be adopted by the end of the year. 

The minister also voiced support for the Commission's recent proposal for a reduced VAT rate on labour-intensive services, such as catering in restaurants. "A little bit of openness [in these areas] would not do us harm," she stated (EurActiv 08/07/08).

Asked whether the French would keep pushing for reduced VAT on fuel to curb soaring oil prices despite the rejection of the suggestion by the EU finance ministers (EurActiv 03/06/08), Lagarde replied that she would only reconsider if there was a common agreement between all member states.