Hollande to make final push with Germany ahead of summit
(PARIS) - French President Francois Hollande will make a final push Wednesday to bridge positions with Germany's Angela Merkel as the two meet on the eve of a crucial summit on the eurozone debt crisis.
As they often do before major European Union summits, the heads of Europe's two biggest economies will meet for a working dinner in Paris before joining the bloc's other leaders in Brussels for a two-day summit starting Thursday.
Hollande is expected to continue pushing to refocus the eurozone's economic policy towards reviving growth and mutualising debt, but will face fierce resistance from Merkel, the key backer of the bloc's austerity drive.
"The chancellor is going to Paris for an exchange of views... This is not a decision-making session," German government spokesman Steffen Seibert said Monday, adding that the meeting will help "define positions" ahead of the EU talks.
Since his victory last month over right-winger Nicolas Sarkozy, Socialist Hollande has tangled with Merkel over the eurozone's fiscal policies, with bloc pay-master Germany pushing for deeper political and economic integration as a condition for moves towards sharing the debt burden.
At a mini-summit of Germany, France, Italy and Spain in Rome on Friday, Germany accepted calls for growth measures.
The heads of the eurozone's four biggest economies agreed to a stimulus package worth up to 130 billion euros ($162 billion) including a capital injection for the European Investment Bank, the redirection of some unspent EU regional funds and "project bonds" to finance infrastructure works.
But there was no talk at the meeting of other key proposals put forward by France and Italy and opposed by Germany, such as eurobonds that would pool the bloc's sovereign debt and allowing bailout funds to buy the bonds of struggling economies on the secondary market.
Merkel instead continued calls for closer political integration, prompting Hollande to insist there would be "no transfer of sovereignty without greater solidarity" in dealing with the bloc's overall financial burden.
Merkel said Monday she was worried there would be too many calls to pool eurozone debt at the EU summit.
"When I think of the summit, what worries me is that there will be all sorts of ideas about how to pool debt and not enough ideas about controlling" the finances of various struggling eurozone states, Merkel said in a speech in Berlin.
Merkel said eurobonds not only ran counter to Germany's constitution, they were "economically wrong and counterproductive".
A French diplomatic source, speaking on condition of anonymity, said there was no sign Merkel was prepared to give ground and that Hollande would likely have to be content with the new growth plan.
The source said Hollande was also probably to agree a road map for closer political integration and look to mend fences with Merkel.
"It is important to stand side-by-side before the summit... We are not playing the game of tactically isolating Germany," the source said.
"The confrontation (between Hollande) and the chancellor has been a bit over-interpreted. Francois Hollande had to distinguish himself from Sarkozy, who was seen as Merkel's poodle.... Things will go back to normal," the source said.
"On growth, the text will probably allow France to say it obtained EU investment in reviving activity," a European source said. "So Hollande moved the lines and obtained growth (measures)."
Elected on a platform of left-wing reforms, Hollande is keen to win concessions from Merkel and has touted the growth measures as a key French initiative.
But he has dropped his insistence that the eurozone fiscal austerity pact approved in March be re-negotiated -- a key promise of his election campaign.
Hollande is facing a tough struggle at home to tackle France's troubled public finances, a stagnant economy and rising joblessness.
His government met Monday to begin talks on next year's budget, under pressure to bring the deficit under control.
Finance Minister Pierre Moscovici said the government needed to find up to 10 billion euros to cut its deficit to 4.5 percent of Gross Domestic Product by the end of this year as planned.
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