PARIS/BERLIN: President Francois Hollande pledged yesterday to carry out long overdue reforms of France’s pension system and labour markets but said it was up to Paris, not the European Commission, to determine how they are implemented.
At a joint news conference with visiting German Chancellor Angela Merkel, Hollande defended his comment that the EU executive cannot “dictate” reforms to member states — a defiant, nationalist tone that angered Germany’s ruling conservatives.
The two leaders agreed to propose that the 17-nation eurozone appoint a full-time president and hold more frequent summits to coordinate economic policy. They also promised to speed up the disbursement of €6bn in EU funds to fight youth unemployment.
Hollande said France would stick to its objective of balancing its budget in structural terms by 2017 and meet new interim targets set by Brussels, but he bristled at detailed suggestions from the Commission at what to do.
“The details, procedures and way of going about this are the responsibility of the government and the state, otherwise there would be no national sovereignty,” the French leader said.
Merkel, who referred to Hollande as “Francois Mitterrand” before correcting herself, did not comment directly on the controversy but said France had been given two extra years to meet its deficit reduction target in return for implementing reforms.
“These go hand in hand,” she said, noting pointedly that Spain, Italy, Greece, Portugal and Ireland had already undertaken deep structural changes.
Unveiling reform recommendations for the 27-nation European Union on Wednesday, the Commission urged Hollande to rein in French public spending, revamp pensions and cut labour costs in return for a two-year reprieve on budget deficit targets.
With concern growing in Germany that the eurozone’s second largest economy is slipping deeper into decline, Merkel allies warned that Hollande’s attitude could undermine efforts to bolster the euro zone economy.
On the day of her Paris visit, new figures showed French unemployment had risen to a record 3,264,400 in April after two unbroken years of monthly rises. Hollande stuck to his promise to reverse the trend by year end despite economists’ scepticism.
“It can’t work when a big country like France says it can do what it wants,” said Michael Fuchs, deputy parliamentary leader of Merkel’s Christian Democrats.
“If a country in the EU and eurozone thinks it needn’t keep promises, that is worrying,” he added.
Norbert Barthle, the party’s spokesman on budgetary matters, accused Hollande, whose poll ratings have fallen faster than for any modern French president as the economy has slid into recession, of playing to a domestic audience. He said the EU Commission had been too generous in giving France a further two years to bring its deficit below the bloc’s three percent ceiling after Paris conceded it would miss the target this year.
REUTERS
