"It is important that we break with the idea that growth always costs a lot of money and must be the result of expensive stimulus programs," Merkel said in an interview due to be published on Wednesday in Hamburg's Abendblatt newspaper.
She added that the eurozone's recovery would depend on rebuilding national finances as well as structural reforms of the job markets and education.
Hollande has promised to turn Europe's fiscal pact, which focuses on debt discipline, into a "growth pact". By his own calculations, these policies will cost an extra €20 billion over five years.
Anticipating some tension, Mario Monti said earlier this week that Italy could help France and Germany find “a new equilibrium,” if Hollande wins the elections.
"We [Italy] have become more pressing and, I hope, more persuasive in a European context," Monti said at a debate with former World Bank economist Joseph Stiglitz in Rome, hosted by a centre-left think tank, FEPS. "What could happen in France would be a very important factor," he said.
This week, the Wall Street Journal headlined a blog with the suggestion that Monti is likely to become "Ms Merkel’s next (Roman) lover”. The thesis is that if Sarkozy loses the election the long and fruitful Franco-German-led Europe would be destined to end, or at least go through a phase of adjustment. In this case, the WSJ says, "Rome is ready to replace Paris."
In reality, this is something more than just journalistic speculation. In recent months, Monti and his government have built an alliance system based on ‘variable geometry’. This term was coined by Italian cohesion Minister Fabrizio Barca. It describes a policy that has been credited with bringing Italy back into the heart of the European gamesmanship and helping to 'keep Great Britain on board,' after its rejection of the Fiscal compact.
This policy was first behind the initiative to complete the single market, initially signed by 12 heads of State and Government, sent to the Commission and the Council on the eve of the last European Summit. Germany and France were originally absent from the list, but Germany has since been persuaded to sign up to it, along with several other countries, boosting the number of signatories to 21.
This was followed up with an Italian alliance built with Great Britain and Poland, and combining three different outlooks on the Structural Funds: the Anglo-Saxon, the Central and Eastern Europe and Mediterranean. Finally, the letter of all net contributors to the EU budget - except Britain - determined to re-orient towards growing the EU budget.
But Italy won’t be an easy love affair for Merkel. “We want to put Germany to the test, but the way one does with a friend, holding their hand instead of threatening them,” Enzo Moavero Milanesi, the minister for EU affairs, told the Italian press.
Rome is keen to secure German support for the launch of euro bonds, a project that the German chancellor insists will only happen at the very end of a long path of austerity and structural reforms.
Italian daily La Repubblica this week reported on plans for the Italian and German parliaments to ratify the fiscal compact simultaneously in a symbolic gesture aimed at emphasising close ties between the two countries.