FRANÇOIS HOLLANDE, the socialist candidate for the French presidency, has said his victory in the first round of the election has “liberated” voices calling for pro-growth measures to be placed at the heart of Europe’s recovery efforts.
Mr Hollande agreed that tighter budgetary rules, as set out in the EU stability treaty, should be written into national law, but these must be accompanied by measures to spur growth and create jobs.
“Budgetary responsibility? Yes. Austerity for life? No,” he said.
He pointed to remarks earlier yesterday by European Central Bank governor Mario Draghi, who said the EU needed a “growth compact”, as a sign that his ideas were taking hold.
“Today, many heads of state and government are waiting for the French election so that it too will open up new discussion.”
Speaking to journalists in Paris, Mr Hollande said that if elected on May 6th he would write to EU governments setting out four elements he wanted to see agreed.
He “hoped” they would be included in a revised stability treaty; if not, “another treaty” could be arranged. “These things happen by negotiation,” his policy chief, Michel Sapin, told The Irish Times.
Explaining his proposals yesterday, Mr Hollande said that he wanted to see the creation of jointly-issued eurobonds, “not for the mutualisation of debt” but to fund infrastructure and jobs.
Funding for the European Investment Bank should be increased to finance big infrastructure projects, a financial transaction tax should be agreed by states that wanted to participate and structural funds should be reoriented towards research and enterprise.
Mr Hollande agreed that budgetary discipline, the centrepiece of the stability treaty, was essential. He said he was committed to reducing France’s deficit to 3 per cent of gross domestic product by 2013 and balancing the budget by 2017.
He was keen yesterday to appear understanding of Germany’s positions, saying that if elected he would have “firm and friendly” talks with Chancellor Angela Merkel.
However, he took a swipe at the performance of Dr Merkel, who has declined to receive him in Berlin during the campaign and has declared her support for Mr Sarkozy.
“She led Europe alongside Nicolas Sarkozy. We can see the results. If I am elected president, there will be a change in how we build Europe,” he said.
“Germany must understand that it’s growth that will allow us to resolve a large share of the problems,” he added.
While European governments may feel they can work with Mr Hollande’s proposals on the stability treaty, his call to reorient the European Central Bank to allow it to promote growth and jobs is bound to meet stern resistance.
“I have always called for the statute of the European Central Bank to be reviewed,” he said. “But it would be better, without having to change the statute, if the ECB could intervene as first and last resort for states.”
The idea, previously advocated by Mr Sarkozy, was strongly opposed by Berlin, which insisted the bank should stick to its price stability mandate and not have its independence drawn into question.
