Hollande on collision course with Merkel

Hollande, currently polling higher than President Nicolas Sarkozy, has made opposition to the treaty a central plank of his campaign suggesting that it imposes too much of Berlin's belt-tightening policy on the EU.

He highlights the ambiguous role of the EU's highest court in policing member states efforts to implement balanced budgets, or debt brakes, which is the heart of the treaty.

"In what context would (the court) intervene to ensure compliance with budgetary discipline? What is the nature of the punishment for states that do not respect it? These are points that should be clarified," he said.

Hollande also wants to make some "additions" to the treaty, agreed by 25 member states at a summit last month, saying that it needs more elements fostering economic growth.

He suggests the financing of big industrial projects, increasing the borrowing capacity of the European Investment Bank and using EU aid to subsidise investment projects in economically weak states.

Hollande reckons the ratification threshold of 12 member states will nowhere near be reached by the time the second round of French elections rolls round, on 6 May.

"This treaty will be signed (by EU leaders) on 1 March, but I am not sure that, by the month of May, more than one or two countries will have ratified it. So, a treaty signed but not ratified, we can renegotiate it."

His position, which is expected to be further elaborated on 17 March when he meets up with other centre-left leaders from Europe, puts him on direct collision course with German Chancellor Angela Merkel.

Merkel has pushed through the treaty largely to ease concerns among her backbenchers that a situation such as in debt-ridden Greece - currently in line for second EU-IMF bailout - does not happen again in future.

Hollande's opposition to the document prompted Merkel to offer to campaign for her centre-right colleague Sarkozy, even though the French president has yet to announce his candidacy.

At the beginning of the week, she appeared in a short joint television interview with the French president, who has fully aligned himself with German economic thinking, and said she would support him "whatever he does."

Meanwhile, she has yet to answer a request by Hollande for an audience in Berlin. When pressed on her tardy response she said: “I think we have more important problems to solve.”

But analysts suggest she is taking a big political risk by siding so overtly with Sarkozy, and potentially poisoning relations with a possible future occupant of the Elysee Palace.

Meanwhile, Hollande may find it hard to get through his growth friendly initiatives should he get elected.

Left-wing Italian Roberto Gualtieri, one of the three MEPs observing the making of the fiscal discipline treaty, regularly documented the difficulty in getting any reference to growth into the text.

Meanwhile, at their January summit, devoted to promoting economic growth, EU leaders removed an initial reference to strengthening the lending capacity of the European Investment Bank.