François Hollande, the frontrunner in France’s presidential election, stepped up his campaign for fresh initiatives to boost European growth on Wednesday, saying Germany had to accept it was the only way to solve the eurozone crisis.

At a press conference in Paris, the Socialist party leader sharpened his tone on Europe, clearly responding to the big vote won in Sunday’s first round of the election by far right and far left candidates who strongly attacked austerity policies led by Berlin.

He called for a “new Europe” which stressed “solidarity, progress and protection” and warned against a split between northern and southern countries in the European Union.

“If we say Germany will pay to cover the debts and deficits, I understand their reticence. Everybody must make their efforts [on public finances],” he said.

“But Germany must realise that it is growth that will allow us to solve a big part of our problems.”

Mr Hollande said if he beat President Nicolas Sarkozy in the final round on May 6, as opinion polls suggest he will, he would immediately write to all fellow European heads of government calling for a growth pact to be added to the new fiscal discipline treaty and for a dialogue with the European Central Bank on ways to finance “the real economy”.

Financial markets have been unsettled at the prospect of a victory for Mr Hollande, fearing his refusal to ratify the EU’s fiscal treaty unless his demands are met could unleash fresh eurozone wrangling on deficit cuts.

Policymakers from Germany, which persuaded 24 other EU partners to sign up to the fiscal treaty, have insisted that there will be no renegotiation of the treaty. It has already been ratified by a number of countries and will be the subject of a referendum in Ireland on May 31.

Mr Hollande reiterated that France under his leadership would not ratify the fiscal treaty without changes. But as Michel Sapin, his policy chief indicated in an interview with the Financial Times, Mr Hollande might settle for an addendum on growth rather than demand a wholesale changes to fiscal rules.

Mr Hollande said: “There certainly will be a renegotiation. It will be part of the negotiation whether the current treaty is modified, which I want, or we organise another treaty. But the treaty [as it is] will not be ratified by France”.

Asked if this heralded a clash with Angela Merkel, the German chancellor, he replied: “I will open this discussion firmly and amicably with Ms Merkel.”

Mr Hollande claimed “lots” of European leaders were waiting for the French election to swing behind his views. He claimed backing for his approach from Mario Draghi, governor of the ECB, who also called on Wednesday for a growth pact– although, like Ms Merkel, he emphasised the need for countries to instigate structural reforms.

Mr Hollande’s proposed growth plan would comprise four elements: the creation of commonly issued eurobonds “not for the mutualisation of debt but to finance” infrastructure, industrial investment and employment; additional financing of investment by the European Investment Bank, the bloc’s long-term lending arm; the imposition of a financial transaction tax by those EU member states willing to use it to find development projects; and the more efficient use of EU structural or regional development funds.

Get alerts on Central banks when a new story is published

Copyright The Financial Times Limited 2020. All rights reserved.
Reuse this content (opens in new window)

Commenting on this article is temporarily unavailable while we migrate to our new comments system.

Note that this only affects articles published before 28th October 2019.

Follow the topics in this article