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22nd Jul 2018

Hollande sees his calls for 'growth pact' vindicated

  • Francois Hollande has so far been snubbed by Germany's Angela Merkel (Photo: Francois Hollande)

French Socialist candidate Francois Hollande has reaffirmed his intention to re-open the treaty on fiscal discipline to include a "growth pact" and said his stance is gaining support.

The frontrunner in the French presidential elections said in a press conference on Wednesday (25 April) that if elected, he would send a letter to other EU leaders proposing a "growth pact" to be added to the existing treaty on tight budget rules.

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“Budgetary responsibility? Yes. Austerity for life? No," he said, explaining that his pact would include a financial transaction tax and eurobonds - two ideas that so far have failed to get the backing of all member states.

Eurobonds, which would virtually mutualise debt across the eurozone, is strongly opposed in Germany.

Hollande pointed to remarks earlier on Wednesday by European Central Bank chief Mario Draghi, who said a "growth compact" was the most "present" thing on his mind.

"The fact that the ECB president has also added his voice to others' confirms that the commitment I have made will make the French election a decisive moment for Europe," the Socialist candidate said, adding that he believed many other leaders are waiting for the outcome of the French elections to "open up a new discussion."

“Germany must understand that it is growth that will allow us to resolve a large share of the problems,” he said with Berlin's austerity-dominated thinking the main force behind the fiscal compact.

But Hollande also noted that budgetary discipline is important and said he was committed to bringing down France's deficit to three percent of its gross domestic product by 2013.

Meanwhile, Germany Chancellor Angela Merkel, speaking at a conference hosted by the Christian Democrats, agreed that growth is "also needed", but had an entirely different interpretation of Draghi's words.

"Growth in the form of sustainable initiatives, not just economic stimulus that simply increases sovereign debt, but rather growth in the form as expressed today by the president of the European Central Bank, Mario Draghi, in the form of structural reforms."

Merkel has so far snubbed Hollande by refusing to meet him ahead of the 6 May elections, while openly supporting the incumbent Nicolas Sarkozy, who also hails from the centre-right.

EU officials in Brussels expect that if Hollande were to win, an 'annex' could be attached to the fiscal discipline treaty mentioning growth. But changes to the European Central Bank statute or eurobonds are far less likely to happen any time soon.

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