France faces die tough task of piloting Europe past financial market turmoil and record oil prices when it takes the helm of European economic policy this week under a cloud of controversy.

French Finance Minister Christine Lagarde is to chair on Tuesday the first meeting of her EU counterparts since Paris took over the rotating six- month presidency at die beginning of the month.

The talks are to focus in particular on what can be done to cool red-hot oil prices or at least ease their impact on consumers and tightening oversight of credit rating agencies.

No stranger to controversy when it comes economic policy in Europe, French President Nicolas Sarkozy already stirred up flaps even before the start of its EU presidency by criticising EU trade chief Peter Mandelson and floating proposals to cut sales taxon fuel.

Moreover, France is under pressure from its EU partners to ensure its public deficit will not breach European rules, putting Paris in an embarrassing position as its presidency of the bloc gets underway.