Hollande and Merkel hold euro talks in Berlin

Wednesday, 16 May 2012, 06:25

 

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Newly inaugurated French President Francois Hollande has pledged to work with Germany to resolve the EU's economic crisis.

He was speaking in Berlin following talks with German Chancellor Angela Merkel, hours after being sworn in.

Both leaders said they wanted to keep debt-stricken Greece in the euro. They will hold an informal summit on 23 May.

Mr Hollande said "everything must be put on the table by everyone" that could promote growth.

He included the possibility of eurobonds, which would pool the debts of eurozone nations, backed by all 17 member governments.

Germany has always rejected the idea of eurobonds.

'Dimension of growth'

During his election campaign, Mr Hollande said he wanted to renegotiate the EU's fiscal pact, which will require its signatories to balance their budgets. Mrs Merkel has said the terms of the agreement cannot be changed.

"As president of the [French] republic, I want to renegotiate what was accepted at a certain stage to give it the dimension of growth," he said, standing alongside Mrs Merkel at a news conference in the German capital.

For her part, Mrs Merkel said France and Germany were willing to "study the possibility of additional growth measures in Greece".

Greece is struggling to enact the austerity measures required by the EU and International Monetary Fund (IMF) in return for a bailout of 130bn euros ($170bn; £105bn).

Both Mr Hollande and Mrs Merkel said they wanted Greece to stay in the euro.

"We wish to have Greece within the euro and we know that the majority of the Greek population agrees with us," Mrs Merkel said.

As the eurozone's two biggest economies - and biggest contributors to its bailout funds - Germany and France are key decision-makers over the strategy supposed to pull Europe out of crisis.

According to official figures released on Tuesday morning, the French economy showed no growth in the first quarter of 2012. Growth in the final quarter of 2011 was also revised down to 0.1% from 0.2%.

However, Germany's economy grew by a stronger than expected 0.5% in the first three months of the year.

'Lightning strike'

Earlier on Tuesday, Mr Hollande was sworn in for a five-year term, becoming France's first Socialist president in 17 years.

In his inauguration speech, Mr Hollande said he wished to deliver a "message of confidence".

The new president said he was fully aware of the challenges facing France, which he summarised as "huge debt, weak growth, reduced competitiveness, and a Europe that is struggling to emerge from a crisis".

He named Jean-Marc Ayrault, leader of the Socialist group in parliament, as his prime minister.

Shortly after the ceremonies, Mr Hollande departed for Berlin.

But his plane was apparently hit by lightning and had to turn back to Paris.

No-one on board was hurt, and Mr Hollande resumed his journey on a second plane, arriving 90 minutes later than scheduled.

Mrs Merkel described the lightning strike as "a good omen".

Francois Hollande at a glance

Born 1954 in Rouen

Socialist party leader 1997-2008

Has proposed 75% top rate of tax

Wants to renegotiate EU fiscal pact

Source: BBC News

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