France's Hollande wants concrete treaty additions

By @ibtimes on

French Socialist Francois Hollande will seek to add specific measures to stimulate economic growth to Europe's fiscal compact if elected president in May, and will not settle for cosmetic tweaks, his campaign manager said on Wednesday.

Pierre Moscovici said Hollande, the election frontrunner, had no intention of unravelling the treaty signed by 25 of the European Union's 27 members last week, but was determined to push for precise measures that could boost economic growth.

What we want is not something cosmetic. It's real and voluntary. It's about rebalancing and reorienting European integration, Moscovici told reporters, adding: We will be extremely demanding on this issue.

Hollande, who leads opinion polls for the two-round election in April and May, is rattling nerves in mostly conservative-led European capitals with his determination to tack new clauses onto a treaty he describes as incomplete.

Moscovici said adding a growth focus to a treaty that is based around enforcing budgetary rigour could help repair disillusionment among the public over the European Union and austerity measures imposed over the debt crisis.

This growth dimension is missing in the European Investment Bank. It's missing in what we could call project bonds - Eurobonds geared for growth projects. It's missing in the role of lender of last resort for the European Central Bank, he said.

Hollande has already said he supports the issuance of common euro zone bonds, an idea Germany has so far ruled out. He is also keen to give European institutions and national parliaments more say in euro zone policy and move away from a power duopoly created in recent months by the French and German leaders.

I want to reaffirm my commitment to the European project, but with conditions, Hollande said in London last week.

DEAL WITH BERLIN

A Hollande aide involved with setting Europe policy said separately on Wednesday that Hollande planned to propose a deal to Berlin whereby France would trim its state debt and deficits in return for obtaining some of its demands on growth clauses.

Francois Hollande wants to put right France's situation and, along with Germany, get back to frank and truthful language, the aide said.

While Hollande's team says it could count on support from countries like Italy, Spain and Austria for his idea of some focus on growth as well as austerity, any sign that the fiscal compact could come undone would shock financial markets.

France's Socialists are also hopeful that if they win power, Germany could also shift left in a 2013 election and thus come into line on the growth idea.

The issue of growth will eventually come up in Germany, said the Hollande aide, noting German economic growth will slow to 0.6 percent this year.

France's Socialists have opposed President Nicolas Sarkozy's push to enshrine a budget-balancing rule in the constitution -- as pushed by Paris and Berlin late last year -- but are willing to pass a law setting the same constraints if they win power.

Hollande is expected to say more on his ideas for Europe at a meeting of European socialists in Paris in mid-March. If elected on May 6, he would attend a European summit the following month.

His advisers say he wants the fiscal compact to stipulate that a certain proportion of government spending should go into areas like industrial research and development and green energy.

Prime Minister Francois Fillon wrote in an editorial in weekly Le Point magazine that the new EU treaty signed on March 1 already included wording on economic growth, and sniffed that European treaties were not bits of paper that can be torn up at will.

To promise the French people that we are going to renegotiate the treaty is either naivety or it's lying. France's word is in jeopardy, Fillon wrote.

Sarkozy this week dismissed a report in the German weekly Der Spiegel that European leaders concerned at Hollande's plans for the bloc had formally agreed to shun him in the runup to the election.

(Additional reporting by Elizabeth Pineau; Editing by Ruth Pitchford)

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