Solutions needed now, says Francois Hollande
German Chancellor Angela Merkel and French President Francois Hollande, at the Elysee Palace in Paris yesterday, committed to union but stuck to their positions. Picture: AFP Source: AFP
FRENCH President Francois Hollande called last night for "very quick solutions" to help eurozone nations in financial trouble as he arrived for a crucial EU summit.
"I have come to find very quick solutions to support the countries facing the biggest problems in the markets," Mr Hollande said, in a clear reference to Italy and Spain.
Action should be taken to "support countries that have undertaken reforms but cannot withstand interest rates that are too high", he said.
EU leaders began to arrive for a two-day summit hoping to deliver a convincing response to the eurozone debt crisis but they remain divided over a raft of issues, including short-term moves to relieve Italy and Spain.
The French Socialist leader, who travelled to the summit on a Paris-Brussels train, called for a medium-term plan to restore confidence in the 17-nation eurozone.
"Growth must be at the heart of our commitments," Mr Hollande said, adding that a growth pact to be discussed by EU leaders must total between E120 billion ($148bn) and E130bn, which "we want to be spent rapidly".
A letter from Greek Prime Minister Antonis Samaras asks EU partners to "respond to sacrifices" by recession-hit Greeks, and seeks changes to the conditions of a second EU-International Monetary Fund bailout.
Mr Samaras, who is recovering from eye surgery and was to miss the EU summit in Brussels, made the call in a letter due to be delivered last night by President Carolos Papoulias, Ta Nea newspaper said.
Mr Papoulias, who flew to Brussels economy-class, had already delivered a copy of the letter to EU president Herman Van Rompuy, Greek reports said.
The full contents had not been made public, but government sources said the newly elected conservative Prime Minister argued that Greece's latest rescue package, which provides Athens with an additional E130bn, must be revised to take into account a greater than expected recession.
On the other hand, Mr Samaras insists he will honour Greek pledges to overhaul the economy, slash the deficit and control a runaway debt of more than E350bn, the Ethnos daily said.
Mr Samaras heads a three-party coalition put in place after the June 17 elections with the aim of renegotiating the bailout by placing more emphasis on growth to overcome a five-year recession.
The conservatives, socialists and moderate leftists in the coalition want a two-year extension, to 2016, for Greece to meet fiscal targets under a memorandum signed with the so-called "troika" of creditors -- the IMF, EU and European Central Bank.
EU leaders were expected to examine a compact for growth and jobs aimed at countering record unemployment and an economic downturn.
The heads of state and government also hoped to discuss plans to create a banking union and increasingly centralise control over budgets. The summit is expected to agree only on a roadmap to be finalised at another summit at the end of the year.
Hopes of a grand bargain to start curing Europe's ills were brushed aside late on Wednesday by German Chancellor Angela Merkel, who said Berlin would not entertain the short-term remedies backed by France and most of the rest of the world.
Ms Merkel, in Paris yesterday to cool her spat with French President Francois Hollande, told the Bundestag she aimed to shoot down demands for quick and medium-term measures to share debt among the 17 members of the eurozone as a way of easing the pressure on Spain, Italy, Greece and potentially France.
The French and German leaders pledged a joint commitment to the European cause but stuck to their positions.
Mr Hollande said he agreed with Ms Merkel on the need to "deepen economic, monetary and, in the future, political union" but qualified that by calling for "solidarity as much as possible".
Solidarity is the French codeword for sharing eurozone debt and risk.
Ms Merkel said "we need a Europe whose members help each other" but put the emphasis on "building a strong and stable future Europe".