Sarkozy combative as France assumes EU presidency

[Silverback]

PARIS - President Nicolas Sarkozy was in combative mood Monday as France assumed leadership of the European Union, criticizing the bloc's trade chief and warning Europe's central bank against raising interest rates.

Some analysts have questioned whether Sarkozy's sometimes brash and often direct style will be suited to the task of building consensus among the EU's 27 member nations as France holds the rotating presidency for the next six months.

The EU is facing formidable problems in high oil prices, the threat to overseas sales from the euro's strength against the U.S. dollar and uncertainty about the bloc's future after Ireland's voters rejected a reform treaty this month.

In a TV interview, Sarkozy reiterated France's priorities during its half-year at the helm would be stemming the influx of illegal immigrants, combatting global warming and softening the blow of oil prices. He said Europeans also want the EU to deal with threats posed by globalization.

"The European idea will be in danger if we don't protect Europeans," Sarkozy said.

One of Sarkozy's long-standing complaints is that the EU's euro currency is overvalued, hurting European economic competitiveness in global trade.

The European Central Bank is widely expected to raise its interest rates this week amid high inflation in the euro zone — a move that could send the currency even higher against the dollar.

Sarkozy said raising interest rates would prevent people and companies from borrowing and investing. He blamed inflation on rising prices for commodities like oil and said doubling or even tripling interest rates would not bring oil prices down.

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