Brussels, 28/08/2012 (Agence Europe) - “The first challenge is the crisis affecting Europe: too many years of carelessness have piled up the debts, weakened our industry and shaken social cohesion”, French President François Hollande said on Monday 27 August addressing the 20th conference of ambassadors. He also believes that Europe bears a part of the responsibility (saying it has not protected us as one might have hoped) and there is the risk that austerity will serve to increase the doubt cast on European policies.
The French president forcefully underlined that France is fully resolved to act in favour of Europe and to preserve the single currency. The euro, he said, is irreversible as it is a fundamental commitment. Defence of the euro cannot be summed up, cannot be just a simple financial calculation, he stressed, insisting that it is the essential condition of economic governance. France also trusts that Greece will remain in the eurozone, even if that country must take the necessary measures and demonstrate its credibility. Hollande went on to say that Europe, also, must understand that the Greeks have for years been making an effort and so everyone must do their duty, disciplines must be respected, and credibility must be demonstrated. He went on to add: “But we must also support growth in that country”.
The French president considers that the future of the euro cannot be reduced to budgetary discipline alone. He defended political union (unified integration allowing, at every stage, new mechanisms accompanied by democratic progress). “We can open discussion with Europeans immediately and with Germany first and foremost. The roadmap for consolidating economic and monetary union, to be discussed by the end of the year, is already a first step of this approach”, Hollande said.
Eurogroup, debt pooling and enhanced cooperation
France wants to make proposals for consolidating economic governance. The role of the Eurogroup and of its president “must be strengthened”. Hollande also suggests that the heads of state and government should meet “far more regularly to discuss the eurozone” and not just twice a year. The eurozone council must meet more regularly, and instruments of solidarity must be set in place, he said. “In time”, he added, “I believe that budgetary union should evolve towards the pooling of debts, but in the best conditions for everyone, in order to regulate stocks of existing debt, but also to borrow for the future. That will be an element for discussion”.
Finally, integration must, according to France, enable progress towards tax harmonisation and social and environmental convergence.
He also called for a change of methods because these developments will not be able to unite the EU27 - soon to be EU28 - straight away. “Those who want to commit more quickly must be able to do so without it meaning the exclusion of the others. Some plan to join the euro and they are welcome; others don't and we must consider them the same, in this position of being aside. I am in favour of implementing enhanced cooperation which allows those who decide together that they want to commit to move forwards more quickly.”
Growth pact, banking union. He also spoke about the growth pact, “the measures for which must be implemented swiftly”. France will swiftly make proposals to expand these policies, to give priority to innovation and investment, and to defend European production. Hollande trusts that the European Commission will bring it about so that “we will not lose time in implementing these decisions and spending the funds of €120 million that have been identified”. Paris also wants to put an end to the doubts that feed speculation. This is the sense of the decisions taken on 29 June by the European Council. “An agreement exists for the European stability mechanism, in cooperation with the European Central Bank, to be able to intervene in order to reduce the interest rates of sovereign debt when they become prohibitive.” Do we again need to wait for the European stability mechanism to finally be able to act? The Karlsruhe court will provide the answer, Hollande said. Meanwhile, the European financial stability facility (EFSF) still exists. “So the mechanisms exist; they must be implemented and if they still have to be perfected, the Central Bank can contribute. I believe that the moment has come for the arrangements available to the states to be used if these arrangements are demanded”, the French president said. At the end of September, everything must be put in place and the European Council of 18 October will have to ratify the decisions so that before the end of the year a compromise can also be found on banking union and supervision at European level, “which I want, by the European Central Bank” (our translation throughout).
The budgetary treaty, coming within this rebalanced framework, will be submitted to the French parliament at the beginning of October. (LC/transl.jl/fl)