24th Sep 2023

French Socialists repeat call for euro devaluation

  • Merkel and Hollande (l): Devaluing the euro to boost export growth is a taboo in Berlin (Photo:

The ruling French Socialist Party has repeated its calls for a devalued euro in a bid to stimulate France's ailing economy.

The proposal, which forms part of a paper drafted by European centre-left parties ahead of next year's European elections, is unlikely to be popular in Berlin.

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But criticisms of Chancellor Angela Merkel as "self-centred" were removed from an earlier draft during a two-day weekend conference in Paris.

A strong euro makes imports from outside the EU cheaper, but it also increases the price of exports, making it harder for the likes of France to sell their way out of trouble.

Aside from demanding the issue of jointly issued European debt instruments known as eurobonds - also still a taboo subject in Germany - the paper features plans to relax EU state aid rules, and increase the size of the EU budget.

"Right-wingers have ruined Europe and thrown Europeans into precariousness," stated the paper.

"The ambition of the (European) community has been destroyed by an alliance of convenience between British conservatives who only want a Europe on the cheap and a la carte, and the free-market intransigence of the German right," it concluded.

But the paper steers clear of advocating the scrapping of the EU's tough rules on prioritising debt and deficit reduction. Instead the bloc's economic rules "should be revised to incorporate a spirit of cooperation rather than punishment and to prioritise support for growth in each country, respecting (national) specificities."

"I do not like it that when a government goes to Brussels it has the impression of going to see a tough teacher who is going to give it a lecture," said Jacques Delors, a former president of the European Commission.

Hollande, whose personal popularity rates are currently the lowest on record after a little over a year in the Elysee Palace, is under pressure from Brussels to increase austerity measures and introduce radical labour market reforms. In May, Paris was given a two year extension by the European Commission, until the end of 2014, to bring its deficit below the EU-required 3 percent of GDP.

Although the European Parliament poll is just under a year away, Hollande's party faces the prospect of being pushed into a humiliating third place behind the centre-right opposition UMP and the National Front according to a YouGov poll for the French edition of Huffington Post last week.

Meanwhile, Hollande's party suffered another setback on Sunday after it surrendered control of the seat held by former budget minister Jerome Cahuzac, who resigned after admitting to holding a previously undeclared Swiss bank account.

Cahuzac's Villeneuve-sur-lot constituency will now be contested by the far-right National Front and the UMP party, who defeated the Socialists in the bid to reach the two-party run-off.


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