Eurozone crisis weighs heavy on French president-elect
PARIS FRANCE’S president-elect Francois Hollande was plunged straight into the European economic debate on Monday, as doubts over his plans and turmoil in Greece threatened to tip the eurozone back into crisis.
The 57-year-old Socialist won power on Sunday, ousting right-wing leader Nicolas Sarkozy, and is due to take office formally on May 15 before embarking on a packed calendar of major international summits.
First on his agenda will be Europe’s debt crisis, where he is on a collision course with fellow EU leaders over his plan to renegotiate the bloc’s fiscal pact which many credit with saving the eurozone from meltdown.
Hollande promised the cheering crowds that welcomed his election that he would reopen talks in order that the pact focus on growth rather than simply imposing deficit-cutting austerity rules, an idea opposed by Berlin.
“This is the mission that is now mine: to give the European project a dimension of growth, employment, prosperity — in short, a future,” he said.
“This is what I will say as soon as possible to our European partners and first of all to Germany,” he declared. “We are not just any country on the planet, just any nation in the world, we are France.” Germany is France’s traditional partner in Europe, but Chancellor Angela Merkel’s government warned once again that reopening talks on the pact — endorsed by 25 of 27 EU governments in March — would be impossible.
Berlin offered to discuss a separate deal on growth, but Merkel’s spokesman Steffen Seibert said: “It is not possible to renegotiate the fiscal pact.” Merkel nevertheless said she would welcome Hollande to Berlin next week “with open arms” and said they had agreed during a telephone call on Sunday to work “well and intensively” together.
Hollande’s campaign director Pierre Moscovici confirmed that Merkel had been the first head of government in contact with the new French leader after his win and that Berlin would be his first visit after inauguration.
Ireland’s Deputy Prime Minister Eamon Gilmore meanwhile warned that his country would not defer a May 31 referendum on the fiscal pact to give Hollande time to rework the treaty.
The uncertainty generated by Hollande’s election and the political turmoil in Greece, where election gains by hard-left and extremeright parties stripped the ruling coalition of its majority, perturbed the markets.
Stocks tumbled in Asia and opened down sharply in France before recovering, the euro took a new battering and the spread in yields between French and German bonds widened, as markets eyed developments in the eurozone warily.
Japan’s Finance Minister Jun Azumi said the election results in France and Greece could have a “destabilising” effect on the markets, as he warned traders against speculative currency moves.