President Nicolas Sarkozy has fuelled tension with Britain by hailing a Frenchman's nomination to a post overseeing a European banking shake-up as a victory over London but his boasting could backfire on Paris.
Former Foreign Minister Michel Barnier was named as the European Union's internal market commissioner last week, putting him in charge of a radical revamp of banking law, ranging from curbing bonuses to making it harder for banks to lend.
The appointment was greeted nervously in London, Europe's financial capital, where politicians and financiers fear France wants even tighter rules.
Anger mounted when Mr Sarkozy said Mr Barnier could help ensure European economic ideals prevail over the Anglo-Saxon model which he blames for the global economic crisis.
"I want the world to see the victory of the European model, which has nothing to do with the excesses of financial capitalism," Mr Sarkozy said.
Paris is now trying to make up with London. But the damage may already have been done because Mr Sarkozy's crowing will have raised concerns in other European capitals over any French effort to push its own agenda through Mr Barnier.
This could oblige Mr Barnier to work extra hard to prove he is serving European interests, limiting his and France's scope to shape the regulatory overhaul.
"The political rhetoric coming from Paris has woken up the British government to the threat posed by EU regulations," said Anthony Browne, economic advisor to London Mayor Boris Johnson.
"The British government hasn't defended London with quite as much vigour as it could have. Mr Sarkozy's comments have spurred Chancellor Alistair Darling into defending London."
He was referring to a letter to The Times newspaper in which Mr Darling wrote that Mr Barnier must be mindful that Europe is not competing with itself and that measures that could undermine "our cherished single market" must be resisted.
A row between member states is the last thing the 27-nation EU wants after divisive negotiations over the appointment of a President and foreign policy chief, and at a time when disunity could undermine efforts to increase its global clout.
Economic analysts say Mr Sarkozy has long dreamt of making Paris rival London as a financial centre.
"You can trace Nicolas Sarkozy's strategy back to a visit to London in January 2007 when he told French expats: 'Come back to Paris because we want to make it a strong financial centre'," said Karel Lannoo of the Centre for European Policy Studies.
Mr Sarkozy's efforts were underlined by his nomination a year ago of Jean-Pierre Jouyet, an experienced diplomat with good ties in Brussels and a Sarkozy ally, to head France's financial markets authority, the analysts say.
As internal market commissioner, and part of the new 27-person EU executive unveiled by Commission President José Manuel Barroso, Mr Barnier will have significant leeway in setting the EU agenda for financial services.
The most pressing task is to agree an overhaul of financial regulation to prevent any repeat of the global economic crisis, and he will have a key role in crafting new legislation.
But he and the rest of the Commission are unlikely to take office until February because they must be confirmed by the European Parliament, which holds approval hearings next month. Some issues will have been shaped by then.
Any commissioner is also supposed to answer to the Commission's interests, rather than any national interests, although it is hard to completely prevent this in practice.
Much of Mr Barnier's power will depend on his inner circle of advisers and senior civil servants. It is often these officials who write laws and they will help negotiate deals between the European Parliament and countries on laws such as one to curb bankers' pay.
France will want to exert its influence by surrounding Mr Barnier with top French civil servants. It is already close to parliamentarians such as Jean-Paul Gauzes, the lawmaker in charge of brokering a deal on new rules for hedge funds.
Mr Gauzes last month issued an influential report on draft hedge fund laws, urging a widening of the rules, and is understood to have turned to the French financial watchdog for help writing the document.
"The profile for the positions in Mr Barnier's Cabinet have been defined," said a former European official who declined to be identified. "It should be people close to the power, people close to the conservatives in France."
To allay British concerns about Paris steering banking regulation, Briton Jonathan Faull, an experienced civil servant at the Commission, will have a senior role under Mr Barnier.
Mr Barnier's success will also depend partly on building bridges with London's financial centre. This means Mr Sarkozy's remarks have put Mr Barnier in an uncomfortable position because of the need to show he is not just serving French interests.
"He (Mr Sarkozy) is making Barnier's life a lot more difficult," the former European official said. "Mr Barnier needs his civil servants."