AFP

BRUSSELS ITALIAN premier Mario Monti and European Commission chief Jose Manuel Barroso warned on Friday against growth measures that fuel debt, in a veiled rebuff of French presidential frontrunner Francois Hollande.

The pair held a breakfast meeting in Brussels a day after separately contributing to a conference on how to revive eurozone growth, and issued a joint statement that serves as a marker for EU plans ahead of a June summit.

“We agreed that the revival of growth must come through a relentless focus on improving competitiveness and not through higher levels of debt,” they said.

“Fiscal consolidation should therefore proceed alongside targeted investments, to enhance competitiveness while also contributing to increasing demand in the short-term.” Socialist Hollande, who pipped President Nicolas Sarkozy in Sunday’s first round of the French election, said earlier this week that French voters had succeeded in imposing his ideas on EU partners.

The French presidential run-off takes place on May 6
Hollande’s plan, however, received a surprise boost on on Wednesday when European Central Bank chief Mario Draghi called for a “growth compact” to complement the eurozone’s fiscal compact.

Voters are fed up with the pace of austerity they see as responsible for plunging the eurozone back into recession two years after the sovereign debt crisis first bit.

But Brussels appears to have absorbed the Hollande threat and closed ranks behind its existing economic strategy — with only minor concessions.

While investment designed to kickstart economic growth is sought at national and EU levels, Monti and Barroso said the real work — which each said would only pay off in the medium term during Thursday’s conference — should focus on turning cross-border market rhetoric into reality.

“There should be faster and more effective progress in the digital, energy and services sectors,” the two said.

They agreed to meet again on May 15, when Monti is already scheduled to be in Brussels for talks with fellow finance ministers.