PARIS Oct 17 French President Francois Hollande
appealed on Wednesday for more efforts to boost growth across
the euro zone, warning ahead of a European Union summit that
recession was as big a threat as budget deficits.
Hollande told the daily Le Monde that troubled euro zone
states should have the leeway to stimulate internal demand with
salary rises and tax cuts, adding that a longer-term goal must
be to reduce the big differences in borrowing costs in the bloc.
"If we don't breathe some life into Europe's economy, budget
discipline measures won't work," Hollande was quoted as saying
ahead of a two-day Brussels summit due to discuss plans for
stabilising the bloc's debt troubles.
Hollande has challenged Germany's focus on strict austerity
measures since he came to power in May. The International
Monetary Fund weighed in this month, saying Greece, Portugal and
Spain should be given more time to cut their public deficits.
France's Socialist leader also wants the euro zone to move
towards mutualised debt at a later stage in the form of jointly
issued euro bonds - something Germany opposes at least until
budget stragglers can get their public finances into shape.
"The goal, too, is to harmonise interest rates in the euro
zone," Hollande said, noting it was unsustainable to have some
states borrowing at 1 percent interest and others at 7 percent.
"Budgetary union must be completed with a partial
mutualisation of debt, through euro bonds," he said.
In the same inteview with Britain's Guardian newspaper,
Hollande said he would like to see Britain "fully engaged" in
Europe, but added that he could not influence its future.
"I see that for the moment they want to be more in retreat.
The British are tied by the accords they have signed up to. They
can't detach from them. At least they have the merit of clarity.
They aren't in the euro zone or budgetary union. I don't intend
to force them," he is quoted as saying.
British Prime Minister David Cameron, facing a restive
"eurosceptic" element within his Conservative Party, is in
favour of a referendum on whether Britain should agree a fresh
settlement with the 27-member bloc.
"Certain countries don't want to join [the euro zone]:
that's their choice. But why should they come telling us how the
euro zone should be run? It's a pretension I hear but that I
don't think meets the need for coherence," Hollande told the