| PARIS, March 17
PARIS, March 17 France's Socialist
presidential frontrunner said on Saturday he would overhaul an
EU budgetary treaty to include a financial transactions tax and
common European bonds to finance investment in the energy
sector, education and urban development.
Francois Hollande, who has made renegotiation of the fiscal
pact signed this month by 25 European leaders a central part of
his campaign, also said he wanted to change the role of the
European Central Bank to give it a broader mandate for
stimulating growth, not just controlling inflation.
"I solemnly affirm today that I will renegotiate this
budgetary treaty for the good not just of France but the whole
of Europe," Hollande told a meeting of Socialist politicians
from across the continent.
"This treaty is an illusion and it poses a risk ... It
creates the conditions for a lasting economic crisis which would
only reproduce budgetary imbalances."
Hollande said a broad financial transactions tax - dubbed a
Tobin tax after the U.S. Nobel laureate who first proposed it in
the 1970s to discourage speculation - should be applied across
Europe on a wide range of financial instruments, including
derivatives, to fund infrastructure and development projects.
President Nicolas Sarkozy, who trails Hollande in the polls
by a wide margin for the May 6 runoff election, has proposed a
narrower tax in France, mainly on trading in equities, saying he
hoped this would inspire European partners to follow suit.
Hollande said the funding for infrastructure projects could
also come from increased lending by the European Investment Bank
(EIB), and from a more complete use of the structural funds
already available for European Union countries, much of which he
said was going to waste at present.
He also called for the firepower of the euro zone's
permanent bailout fund, the European Stability Mechanism (ESM),
to be boosted by allowing it to access liquidity from the ECB,
like an ordinary bank.
The coalition government of German Chancellor Angela Merkel
has staunchly opposed such a proposal.
"The ECB must go further in playing its role of lender of
last resort," Hollande said. "I know this idea is not shared by
everyone in Europe, but we must extend the mandate of the ECB.
Price stability has been accomplished ... Now supporting growth
should also be part of the ECB's mandate."
Hollande said that new European funds to stimulate growth
needed to be used to regenerate impoverished urban centres
across the continent, finance renewable energy, and provide
opportunities to a generation of young Europeans whose future
would otherwise be blighted by the ongoing financial crisis.
"I want to make the youth a great European cause," Hollande
told the meeting. "I can't accept that youth unemployment is
around 25 percent and there is despair among a generation which
is growing up. Europe must make room for its youth."