Page last updated at 10:23 GMT, Tuesday, 10 February 2009

Sarkozy praise for Brown policies

Gordon Brown and Nicolas Sarkozy
Mr Sarkozy had questioned the UK's economic rescue package

French President Nicolas Sarkozy has praised Gordon Brown for his "key role" in tackling the global downturn just days after criticising UK policies.

Mr Sarkozy caused surprise in Downing Street on Friday when he attacked the UK's stimulus plan and said the recent VAT cut had "absolutely not worked".

This followed earlier criticism of UK policies by Germany's finance minister.

But Mr Sarkozy said on Tuesday he and Mr Brown were working closely together and moving in the same direction.

Different tack

In a communique issued by his office, the president said that he deplored the way in which his earlier comments had been reported by the British media.

In a debate on French TV, Mr Sarkozy had said the UK's decision to cut VAT in November to try and boost consumer spending had "absolutely not worked".

"Britain is cutting taxes. That will bring them nothing. Consumption continues to decrease," he said.

At the time, Downing Street said the French had been in touch to stress the comments were not meant as a critique of UK policy.

But the Conservatives said President Sarkozy was just the latest foreign leader to criticise Labour's policies.

In a 90-minute interview, President Sarkozy defended his plans to revive the French economy, a week after protests and strikes by a million French workers.

He made his comments after being asked why France was investing in infrastructure projects rather than cutting taxes.

In response, No 10 said the government had set out its case for a VAT cut as a way of putting more money in people's pockets and that other countries had to decide what was appropriate for their economies.

German criticism

However, there appeared to be some irritation about the comments as they came while the prime minister was trying to build a consensus for reform of the global financial system ahead of April's G20 summit in London.

Mr Brown's economic stimulus plans had already come under fire in December from Germany's finance minister Peer Steinbruck, who said Britain's response to the crisis had been "crass" and "breathtaking".

The Conservatives say the criticisms undermine the government's claims that other countries have been following the UK's lead over ways to support the economy through the recession.

The Conservatives and Liberal Democrats have both criticised the year-long reduction in VAT from 17.5% to 15% - estimated to cost 12bn.

The Tories say it has been an expensive failure while the Lib Dems said it was a "seriously defective" way of getting money into the economy.

But No 10 has defended it, saying reports suggested it had stopped sales falling as far as they would have done otherwise and its success should be judged over the whole of 2009.

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