France’s newly appointed president arrives in Berlin for his first meeting with Germany’s chancellor
• Hollande meets Merkel, after lightning strike
• Last-ditch talks over Greek unity government collapse
• Fears Greece could run out of funds
• IMF: Greek euro exit would be ‘messy’
• Eurozone economy avoids recession, just
A report in the Financial Times by Quentin Peel in Berlin focuses on how Merkel and Hollande “joined forces” to urge Greece to reaffirm its commitment to membership of the eurozone.
Both spelt out their concern that Greece should remain a full member of the common European currency, while promising to consider new measures to revive economic growth in the country.
But they also agreed that Athens must carry out the austerity programme it has agreed with the European Union and the International Monetary Fund.
argues an editorial in Wednesday’s Guardian, which cites the dire state of the Italian and Spanish economies as well as the situation in Greece.There is plenty of reason to hope that François Hollande has some substance behind his stirring rhetoric about the need for growth,
Yet his policies so far amount to slowing down the pace at which France reduces its (relatively small) budget deficit, and taxing wealth in order to create more jobs.
At an international level, he wants to adulterate the pure austerity his predecessor, Nicolas Sarkozy, agreed with Mrs Merkel. But this is merely to slow progress towards the cliff edge, when what is needed is a U-turn.
What the continent really needs to go for is an outright fiscal stimulus, of the kind even Mrs Merkel agreed to in 2009 (which gave German carmakers such a shot in the arm).
Many commentators seem have decided that this first meeting between Merkel and Hollande was a frosty one.
While both leaders presented a united front in relation to their desire for Greece to remain the Euro, Hollande made a point of emphasising his desire for the eurozone to change direction and embrace a strategy based on growth.
He added that he wanted Europe to pool its ideas on growth measures by the end of June.
From the German side, that Merkel underlined that Greece had to stick to its side of the deal regarding its debt management, reports Kate Connolly:
“We think promises made have to be kept,” Merkel said, following brief talks with Hollande who flew to Berlin just hours after his inauguration.
“We have said whatever we can do regarding structure and growth we’ll do,” she added.
Hollande said: “It’s my wish that Greece stays in the Eurozone… but we have to make it possible for Greece to find solutions to its problems.”
Merkel said she wanted to stress the message particularly ahead of the new Greek poll in June.
“We’ll make clear that we have the expectation or wish that Greece stays in the Euro,” she said, adding that she would be happy to hear of “any additional measures for growth either coming from Greece or that we can suggest to them if they want that.”
Touching on the topic of encouraging growth which very much shaped his election campaign, Hollande added: “We need to be able to say to Greece Europe is ready to support further growth measures so that growth can return to Greece.”
In a sketch of the “first date” between the two leaders today in Berlin, she describes how it was an awkward one despite functional smiles and handshakes.
At one point, Merkel had to correct Hollande when he tried to cross her path as they inspected German troops.
But Merkel is nothing if not a pragmatist, and so the two sat down for a working supper which she knew was going to set the tone for all their future negotiations.
The menu was diplomatic: rind de bouillon with vegetables and pancake stripes, asparagus with veal schnitzel, followed by strawberries and ice-cream and cheese and grapes, along with a range of German wines.
Berlin officials had worked feverishly behind the scenes to create the best possible impression of harmony before the visit, and tried in vain to downplay its significance.
“This won’t be a decision-making summit, rather an initial, get to know you meeting,” a German government spokesman, Steffen Seibert, said before the occasion.
But it was clearly far more than that, with two politicians who had never met before coming together to see not only if they could get on, but whether they could work together to solve one of the most seemingly intractable problems Europe has faced since the second world war.
In terms of François Hollande’s economic vision, some of the real meat was set out earlier today in Paris after he took power in a deliberately low-key ceremony.
Angelique Chrisafis, the Guardian’s Paris correspondent, has filed a report on how the new French president promised “a new path” for Europe, insisting growth measures to kick-start economies would go hand in hand with the reduction of public debt:
He vowed his five-year term would be fair and just. He said he would unite France and bring the divided country much needed calm and reconciliation.
In a series of digs at [Nicolas] Sarkozy, who had been dubbed the president of bling bling, Hollande, in his speech in Paris, promised “scrupulous sobriety of behaviour”.
He saluted the contributions of previous French presidents, including Jacques Chirac’s attachment to the “values of the republic”, but stopped at citing any Sarkozy achievements, saying simply he wished him well in his new life.
Hollande acknowledged the hurdles he faced: “A massive debt, weak growth, high unemployment, degraded competitiveness and a Europe that is struggling to come out of crisis.”
As if the crisis-hit eurozone needed another metaphor for doom, the new president’s first day in office was accompanied by thunder and lightning storms of epic proportions.
Angelique also filed this profile of Hollande’s new prime minister, Jean-Marc Ayrault, a former German teacher who has been working behind the scenes to smooth Paris’s relations with Berlin.
A couple of key quotes in full now from that first joint Merkel-Hollande press conference.
Hollande, who wants to temper Berlin-led austerity policies with pro-growth measures said he and Merkel both wanted Greece to remain in the euro currency zone and hoped voters there would show they did too in a June 17 election.
“I hope that we can say to the Greeks that Europe is ready to add measures to help growth and support economic activity so that there is a return to growth in Greece,” Hollande said.
“On growth, the method that we agreed is putting all ideas and all proposals on the table and seeing what legal means exist to put them into effect.”
It wasn’t exactly a cordial press conference and seemed a little awkward at times even though Merkel and Hollande tried their best to show they will get on, according to Mathieu von Rohr, Paris bureau chief for Der Spiegal.
Again though, as was so often the case during her political relationship with Hollande’s predecessor, Merkel’s body language is under close scutiny:
Merkel didn’t say anything when Hollande used the dirty word “renegotiation” in front of her. But showed a strange smile/grimace afterwards
— Mathieu von Rohr (@mathieuvonrohr) May 15, 2012
Faisal Islam, economics editor at Channel 4 News, has been tweeting what he took from the press conference:
I got a sense that Hollande and Merkel might give a little back to Greece. No strict reference to “full implementation of memo”.
— Faisal Islam (@faisalislam) May 15, 2012
Boils down to this: will Merkel/ Hollande give some ground to Greece over the austerity conditionality ahead of June bailout payment? #HoMer
— Faisal Islam (@faisalislam) May 15, 2012
And that’s it for now. A handshake between the two leaders signals the end of the first joint press conference between the two leaders.
It was a million miles away from anything in the way of political fire-works but, equally, there seemed to have been no attempt to paper over differences.
Hollande emphasised his belief in the need to introduce an impetus for growth within the eurozone while both leaders were completely open about the fact that they disagreed.
A question to the two leaders now on the Greek situation, and whether the new elections will be helpful.
Merkel responds first to another question about what language they used during the discussions this evening.
Everything was talked about in their “native tongues”, she says.
As for Greece, she says that the wishes of the people of Greece have to be respected, and the decision to hold elections.
Hollande says he will respect whatever happens with the Greek vote. He also “appreciates” the suffering of the Greek people
As for the conversation earlier with Merkel, he says that they used “the language of intelligence, the will to find solutions”.
Hollande is once again emphasising the need for growth creation.
Tomorrow, he says that the new French government will seek advice on how to execute the budget of 2012.
The euro is not just a monetary project but “a political project” too, says Merkel.
European have benefitted from this and will continue to do so, she says, adding that those on the continent have the same values: freedom of speech, liberty and democracy.
“This is also expressed via the single european currency,” she says.
Again to the thorny, but ultimately central, question of the Eurozone’s fiscal treaty.
Hollande is largely non-committal in answer to a question about what exactly he will be pressing for but repeats that he has told the French people that he wants to renegotiate it.
Hollande says that he wants efforts towards encouraging growth in the Eurozone to be tangible, rather than just words.
A range of options should be on the table, including eurobonds, adds the French President, referencing an instrument which has long been rejected by Angela Merkel as a possible way of bringing the eurozone crisis under control.
Hollande is talking now about the importance of a “balance” in the relationshup between France and Germany.
The two talked about Greece, he adds. Like his Germany counterpart, he says that he wants Greece to remain in the eurozone.
“We have to allow the Greeks to find solutions,” says Hollande, adding that he hopes the Greeks will express in the forthcoming June 17 elections their attachment to the eurozone.
We wish to have Greece within the Euro and we know that the majority of the Greek population agree with us, says Merkel.
The two leaders talked about what they could to to help greece in terms of “structure”, adds the German chanellor (according to the BBC translator).
The Merkel-Hollande news conference is underway now in Berlin.
Merkel starts by suggesting that the lightning strike on his plane is a good omen for their future relationship.
“We have quite an intensive agenda in terms of European questions,” she adds, in what may be the understatement of the week.
While most of the media spotlight is currently on Berlin, it was Greece that was once again centre-stage earlier today.
In case you missed the news, the country is heading back to the polls again after a final round of talks this morning broke up without a deal following the fractured results of its most recent general election.
Amid fears the new election will do the very thing it is supposed to stop, hasten the country’s economic collapse and exit from the eurozone, the Guardian’s Helena Smith has filed a report from Athens:
After a week of political high drama after inconclusive elections, feuding party chiefs acknowledged their inability to form a unity government on Tuesday, with several blaming Alexis Tsipras, whose Left Coalition party has taken Greece by storm.
“Unfortunately the country is being led again to elections … under very bad conditions,” said the socialist Pasok leader, Evangelos Venizelos, after the breakdown of the last-ditch negotiations at Athens’ presidential palace. “For God’s sake let’s move towards something better, not something worse.”
Across Europe there is no illusion that the poll, expected to take place on 10 or 17 June, is a referendum on whether the near insolvent country – kept afloat by EU and IMF rescue loans – stays in the eurozone.
Within hours of the election being announced, the German finance minister, Wolfgang Schäuble, summed up the predicament Greece now faced. “If Greece – and this is the will of the great majority – wants to stay in the euro, then they have to accept the conditions,” he told reporters at a meeting of European finance ministers in Brussels.
“Otherwise, it isn’t possible. No responsible candidate can hide that from the electorate.”
Back to the issue of the Merkel-Hollande body language. Here’s the take of Kate Connolly, Berlin-based foreign correspondent for the Guardian and Observer:
— Kate Connolly (@connollyberlin) May 15, 2012
While we’re waiting for the press conference to get underway, Reuters has filed an interesting profile of France’s new prime minister, a German speaker whose familiarity with the corridors of power in Berlin may prove invaluable as Paris seeks to temper Germany’s austerity drive in Europe.
The stately, silver-haired Jean-Marc Ayrault, a former German teacher and long-time ally of president-elect Francois Hollande – has made pragmatism his hallmark in holding together the Socialists’ fractious parliamentary group as its floor leader since 1997.
With his understanding of Germany’s language and culture, the conciliatory Ayrault could be a bridge-builder with Berlin after a bruising presidential election race in France that focused on Hollande’s demands to renegotiate a German-inspired budget discipline pact for Europe.
At home, his new government will also face the difficult task of selling inevitable deficit-cutting measures to a public weary of unemployment running at nearly 10 percent.
“This is the outcome of a long fight alongside Francois Hollande for the 15 years we have known each other,” Ayrault said, adding that despite his reputation for shyness he was not afraid to admit he was moved by the appointment.
“I am aware of the difficulty of the task, the mission which awaits me.”
The Merkel-Hollande talks come as an unexpectedly strong recent economic performance by Germany helped compensate for weaker output in Greece, Italy and Spain.
Figures released in European capitals today underlined the two-speed nature of the 17-nation single currency area, even though the 0.5% expansion in Europe’s biggest economy helped to compensate for weaker output in Greece, Italy and Spain.
But analysts warned that any respite could be short-lived, with the latest flare-up in Europe’s long-running sovereign debt crisis likely to damage growth prospects for the rest of the year, reports Larry Elliott, the Guardian’s economics editor:
Figures released in European capitals on Tuesday showed that Germany – which accounts for 27% of eurozone GDP – bounced back from a 0.2% drop in output in late 2011, while France followed growth of just 0.1% with a quarter of stagnation in early 2012. In the year to the end of March 2012, Germany grew by 1.2% and France by 0.3%.
Other countries to post quarterly growth included Finland (1.3%), Austria (0.2%), Belgium (0.3%) and Slovakia (0.8%).
But tough austerity measures took their toll on Italy, where the 0.8% quarterly drop in output was the third in a row; Spain, which saw activity decline by 0.3% for a second quarter; and Greece, which reported that the economy was 6.2% smaller at the end of the first quarter of 2012 than a year earlier.
The Netherlands also posted a third consecutive quarter of negative growth, with activity down by 0.2% in the first quarter of 2012.
Overall, the eurozone economies have shown no growth in the past year, while the 27-nation European Union has seen output increase by just 0.1%.
The Merkel-Hollande press conference is due to get underway in 30 minutes time.
Watchers of this evening’s meeting have had their eyes peeled for the first indications of what the body language will be like between the two leaders.
Sarkozy and Merkel eventually developed a friendlier working relationship as they worked to resolve the continent’s debt crisis, but the relationship between the two often looked awkward to say
Some slightly worrying signs emerged from the meeting earlier in Berlin however as Mathieu von Rohr, Paris bureau chief for Der Spiegel, tweeted:
Merkel had to push Hollande around on the red carpet because he stood on the wrong side.
— Mathieu von Rohr (@mathieuvonrohr) May 15, 2012
Hollande has been received by Merkel with an honour guard ahead of talks.
The two leaders are scheduled to hold a joint news conference following the meeting and then have dinner together.
The two leaders are expected to hold a press conference this evening following talks which, Hollande has said, is about getting to know each other.
But there will be much more going on besides that, as the Guardian’s Europe Editor, Ian Traynor, has explained:
The pressing issue of Greece, for example, as weeks of a power vacuum fuel German exasperation and add to the sense that enough is enough – time for Greece to end its ill-advised sojourn in the single currency.
The Germans and the Greeks have been the opposing poles in the euro crisis for more than two years. Nicolas Sarkozy hitched himself to Merkel and followed the German line.
No one knows yet where Hollande stands, but the signs are he will favour flexibility over German stickling for the rules.
On the broader national and European issues of recession, debt, and fiscal rigour, Hollande has been outspoken and blunt, campaigning as the anti-Sarkozy challenger to Germany’s austerity prescriptions. Asked by French TV if he would arrive in Berlin bearing gifts, he replied: “The gift of growth, jobs, and economic activity.”
Merkel, by contrast, made clear she saw no reason to shift her position on the European debt dilemmas just because of a weekend election rout for her Christian Democrats.
Hollande goes to Berlin on the first day of his presidency buoyed by a fresh and powerful mandate from the voters of France. Merkel, in office seven years and squaring up for a third term next year, looks diminished by the calamity on Sunday in the big state of North-Rhine Westphalia where her CDU slumped by 8 points to record its worst postwar performance there.
It’s the most eagerly awaited dinner date on the international stage for some time, where the debate over growth versus austerity is expected to take centre-stage.
Hours after taking over as France’s president, François Hollande has arrived in Berlin for talks on Europe’s debt crisis with the German Chancellor, Angela Merkel.
In what many are hoping is not an ill-omen, the Falcon 7X aircraft which he boarded earlier was struck by lightning and had to return to the Villacoublay air base outside Paris as a precaution.
Hollande and his entourage were transferred to another aircraft, a Falcon 900, and took off shortly thereafter.
As the future of the Eurozone hangs in the balance, we’re going to bring you full coverage of the first top level meeting between the two current leaders of the Eurozone’s Franco-German engine.