European Trade Commissioner Peter Mandelson launched a harsh attack on French President Nicolas Sarkozy on Friday, saying if everyone followed his vision of the euro and monetary policy it would lead to economic chaos. Sarkozy has repeatedly said the euro is too strong and has blamed this on European Central Bank policy.
"Can you imagine if everyone followed President Sarkozy and then you would have the German Chancellor, the Italian Prime Minister, the President of the Spanish government, each one with a national objective and competing and deciding how monetary policy should be carried out in Europe?" Mandelson said in a script of an interview with France 24 television.
"It would be chaos, our currency would be weak and economically, we would be in a bad way." He said the ECB should be allowed to look after monetary policy independently and praised Jean-Claude Trichet as an "excellent" president of the central bank.
Mandelson also said he thought that Britain should join the euro, but added that he did not think that Prime Minister Gordon Brown, with whom he once served in the British cabinet, would take his country into the single currency.
Mandelson urged China to link its yuan currency to a basket of world currencies including the euro but said the benefit of a policy change by Beijing should not be exaggerated.
"I would hope reforms will be implemented in China. I would hope the Chinese currency could be attached to a basket of currencies, including the euro," he said.
"I don't think China is playing deaf," he said but added that policy change would be slow and the potential advantages for the rest of the world should not be exaggerated.
"I think we run the risk of exaggerating the commercial and economic benefits for the rest of the world if China were to change its currency problem," he said. Mandelson also said he was "always optimistic" about world trade talks but said the window of opportunity for a deal was very small and urged all parties to be more flexible to try and reach a deal.
"If we do not find a realistic breakthrough between now and the summer, or just after the summer, frankly all the attention in the United States will turn towards the presidential elections," he said.