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German, French leaders set growth talks

Published: May 16, 2012 | 7:28 am
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BERLIN — German Chancellor Angela Merkel and French President Francois Hollande agreed Tuesday to spend the coming weeks discussing proposals for generating economic growth in Europe, a first step to bridging their differences over how to tackle the eurozone debt crisis.

The conservative Merkel and Hollande, a Socialist who took office Tuesday, talked up their commitment to building a solid relationship after an election campaign in which Merkel backed then-President Nicolas Sarkozy, her key ally so far in tackling Europe’s financial troubles.

Hollande has criticized Merkel’s austerity-led approach to the continent’s debt troubles and called for more policies geared toward boosting economic growth as opposed to just cutting government spending.

During his campaign, he also called for the European budget-discipline pact pushed by Merkel to be renegotiated.

Hollande said during a joint news conference after their first meeting he “wanted to show that the Franco-German relationship is a constant for the French president” with his visit, which came just hours after he took office.

“We are aware of our responsibility, as Germany and France, for a good development in Europe,” Merkel said. “Carried by this spirit, I believe we will of course find solutions for the different problems.”

Merkel argued that the pair’s differences have been overstated.

Still, the disagreement over the budget pact, known as the fiscal compact, raised concerns ahead of Tuesday’s meeting about the future strength of the relationship between Germany and France, the eurozone’s two biggest economies.

Hollande said that “everything that can contribute to growth must be put on the table by everyone.” He cited possibilities ranging from improving competitiveness — embraced by Merkel — to jointly issued eurobonds, which she has fiercely resisted.

The French leader gave no direct answer when asked whether he is still demanding a renegotiation of the existing fiscal compact.

Once ideas for generating growth have been thrashed out, he said, officials will look at “what the legal ways of implementing them are; and it is at the end of this work that I will be able to answer your question.”

An informal meeting of European leaders on May 23 will be followed by a summit at the end of June.

“I am for budget seriousness,” Hollande said. But, he added, “I am for growth” because that is the only way to reduce debt and cut budget deficits.

Even as they hammer out how to stimulate greater growth, Merkel, Hollande and their fellow leaders will keep a nervous eye on events in Greece, which is to hold new elections next month after its politicians failed to produce a governing coalition following a vote that produced a deeply divided Parliament.


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