Thursday

26th May 2022

Hollande calls for euro government to beat recession

French President Francois Hollande has called for the creation of a eurozone government as a solution to the wide-spread recession that threatens "the very identity" of Europe.

Hollande spelled out his views on Europe during a two-and-a-half hour long press conference in Paris on Thursday (16 May) after being accused of lacking leadership and vision for the EU project.

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  • Hollande, speaking in the Elysee palace, said recession is undermining European identity (Photo: elysee.fr)

With record low popularity rates and on the back of news that France has slipped back into recession, Hollande said an economic government for the eurozone, with its own budget, right to borrow and harmonised taxes, is the only way out the economic slump.

"It is my responsibility as leader of a founding member of the European Union... to pull Europe out of the lethargy that has gripped it," Hollande said.

"If Europe stays in the state it is now, it could be the end of the project," he warned.

Hollande said he can imagine the new structures - which would require a change to the EU treaties - to come into force within two years.

He admitted that this step towards deeper eurozone integration would be a hard sell in Germany, where the idea of a "transfer union" - mutualising debt and redistributing wealth across the bloc - is taboo.

"Germany has several times said it is ready for political union, for a new phase in integration. Well France is ready to give body to this political union ... It is a question of European urgency," he said.

He argued that while the financial crisis is now "behind us ... what is hitting Europe is recession, provoked by austerity policies."

The German government is seen as a staunch defender of austerity policies, even though it has changed its discourse in the past few months and speaks more about youth unemployment.

Amid debate on the lack of personal chemistry in current Franco-German relations, Chancellor Angela Merkel in Berlin noted that she is not "bosom friends" with Hollande, but that they "get along fine."

"What we need above all is a common understanding in Europe - and there unfortunately isn't one yet - of what actually makes us strong and where growth comes from," she said at a European policy forum also on Thursday.

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