| PARIS, Sept 19
PARIS, Sept 19 French President Francois
Hollande's Socialist-led government on Wednesday kickstarts
ratification of a European Union budget discipline pact it
grudgingly accepts as the next step out of the euro debt crisis.
Created in March by Hollande's predecessor Nicolas Sarkozy
and 24 other EU leaders including Germany's Angela Merkel, the
fiscal compact requires euro zone countries to slash their
public deficits or face legal action and possibly fines.
Its entry into cabinet on Wednesday paves the way to likely
approval by French parliament in coming weeks, despite noisy
dissent within Hollande's left-leaning coalition and growing
disenchantment with the European Union among a French public
facing 13-year jobless highs and fearing worse to come.
"We don't like this pact, it is a Sarkozy legacy. Merkel
insisted on it because France has been breaking stability pact
rules since 2003," said Elisabeth Guigou, head of parliament's
foreign affairs committee, said of existing EU budget rules.
"But you don't have to love a pact to ratify it. It's one
part of a deal and just the first step," Guigou, one of the
senior Socialists tasked with rallying the coalition behind the
accord, told Reuters.
The pact is due to be submitted to the French parliament in
early October. It should pass through easily if, as they have
stated, some of the deputies in Sarkozy's conservative UMP party
vote for it.
It will be the latest small step towards resolving Europe's
sovereign debt crisis since Germany's constitutional court this
month allowed a permanent bail-out fund to go ahead and
pro-European parties came out ahead in a Dutch election.
But the passage of the bill will carry a political cost for
Hollande at home and does nothing to forestall a looming clash
with EU paymaster Germany over the deeper measures Berlin
believes are needed for euro's longer-term survival.
Even if it does not change the outcome, a vote against the
accord from some left-wingers and ecologists within Hollande's
coalition will be a political embarrassment just as surveys show
a steady decline in public support for him since his election in
To sweeten the pill - and to try to take the sting out of a
series of street protests due against the pact - the government
is putting it into parliament alongside the package of EU-wide
growth measures he secured at his first EU summit last June.
Moreover France's top court has also said the new budget
rules do not require any change to the constitution, meaning
Hollande in turn can skip a referendum on it which he would not
be certain of winning.
"The public is falling out of love with the European Union,"
French European Affairs Minister Bernard Cazeneuve conceded on
Tuesday, a day after a survey showed that nearly two-thirds of
French would now reject the 1992 Maastricht Treaty that led to
The EU budget pact enters into force either when 12 out of
the 17 euro zone countries ratify it, or on January 1 next year.
Half a dozen, including Germany, have already backed it.
To set an example of fiscal responsibility, Hollande has
promised to find 30 billion euros ($39.17 billion) of savings in
the 2013 budget to shave France's public deficit to three
percent of gross domestic output next year en route to a fully
balanced budget by the end of his five-year mandate.
Yet economists question how he can achieve such savings
without dragging the economy into recession. Hollande
acknowledged this month that growth next year was likely to be
in the region of 0.8 percent, well below the official forecast
of 1.2 percent.
The 2013 budget is due to be announced on Sept. 28. But
there is potential for more upsets further down the line.
French officials warn they could not sell to a wary public
the plans to draw up a new treaty for closer European
integration which, according to German weekly Der Spiegel,
Merkel is beginning to hatch.
"It would not be sensible to launch into talks on a new
treaty before we have got out of the crisis. It will be possible
when there is not this sense of a risk of the euro zone falling
apart, when Greece and Italy are back on track," said Guigou.
"The big issue right now is ensuring that Europe does not
slip into recession."