French socialist Hollande’s arrival reinvigorates dialogue over crisis

Published on 10/05/2012 00:00

French president-elect Francois Hollande began his drive to persuade European partners to shift their economic policy priority from austerity to growth when he met yesterday with European Council president Herman Van Rompuy.

Mr Hollande takes his call to add growth elements to Europe’s fiscal compact to Berlin next week.

European Union officials said they have high hopes for the new French leader’s ability to build a working relationship with German chancellor Angela Merkel that could revive efforts to overcome the eurozone’s debt crisis.

“Hollande’s election is a positive development that has already changed the narrative in Europe, which was getting stuck because of an obsession with fiscal austerity,” one senior EU official said.

Mr Van Rompuy’s visit came one day ahead of a trip to Paris by euro group president Jean-Claude Juncker. Officials are seeking assurances of Mr Hollande’s commitment to reducing France’s budget deficit and controlling public spending in light of his tax-and-spend election platform, the source said.

Ideas that could receive impetus include both short-term moves to promote economic growth and long-term proposals to create common eurozone bonds, as well as a possible eurozone bank resolution and guarantee system, two EU officials said.

“Hollande’s arrival may invigorate discussion on issues that have been frozen for the last few months and give them a welcome push forward,” a second EU official said. “Eurozone bonds are no longer completely taboo.”

In an interview conducted before he defeated Nicolas Sarkozy on Sunday, Mr Hollande told the internet magazine slate.fr that he would discuss common eurozone bonds with the Germans.