German opposition leaders meet Hollande

 

GERMANY’S OPPOSITION Social Democratic Party leaders returned, beaming, from Paris yesterday after paying a courtesy call on the new Socialist president, François Hollande.

Opinion was divided over whether the Elysée Palace meeting was to cement a centre-left Berlin-Paris front against Chancellor Angela Merkel or as a diplomatic affront to the German leader, who declined to receive Mr Hollande in Berlin when he was a presidential candidate.

Receiving Germany’s opposition before the German chancellor in Paris was seen as a signal of Mr Hollande’s determination to collect allies to develop alternative crisis-fighting policies to those previously agreed between Dr Merkel and former president Nicolas Sarkozy. However he may find his German SPD allies as much of a hindrance as a help in taking on the chancellor.

On the one hand SPD chairman Sigmar Gabriel said he and Mr Hollande agreed on the need for measures to boost growth in Europe and a tax on financial transactions. But Mr Gabriel conceded he had to explain to his French host why his party backs Dr Merkel in opposing jointly-issued eurobonds until after EU members agree closer fiscal and economic ties. Instead, Mr Gabriel presented Mr Hollande with a proposal from German economists for a so-called debt redemption fund, providing low-interest credit through common bonds to countries that, in return, accept a fixed repayment plan of excessive borrowing. “We deem the introduction of a debt redemption as the appropriate instrument and our French partners showed a lot of interest in this model,” he said.

With a broad front against eurobonds in Berlin, the new French president is likely to garner maximum support for his growth strategy proposals ahead of the June 28th-29th summit.