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03/12/2016

Hollande announces talks with Merkel on ‘the future of Europe’

EU Priorities 2020

Hollande announces talks with Merkel on ‘the future of Europe’

hollande_meeting_merkel_creditsaly_bechsin_flickr.jpg

[Saly Bechsin/Flickr]

The French President launched a media campaign to regain public favour on Monday (5 January), calling on Europe to show greater conviction in its decisions. EurActiv France reports.

France’s head of state, François Hollande, announced on France Inter that he has accepted an invitation from Martin Schulz, the President of the European Parliament, to a meeting with the German Chancellor on Sunday 11 January.

“I will meet Ms. Merkel again on Sunday, on the invitation of the President of the European Parliament, Martin Schulz, who is German, but also francophone and francophile. We will discuss the future of Europe and the French-German relationship,” the French President said.

France’s head of state spent two hours on morning radio launching his new communication plan, in an attempt to curry favour with the French electorate. His popularity reached a low of 20% among French voters in late December, according to a survey by Odoxa.

‘Merging’ French and German positions

Questioned over the differing views of France and Germany on the European Union, Hollande stressed that he would use the meeting to raise the issue of merging the economic positions of the two countries.

“Angela Merkel wants France to become more competitive and we, in France, are waiting for the relaunch of the German economy, we are looking for growth. We have to find a way to merge our positions,” he said, referring to the Juncker investment plan, announced in December, which he described as “an important step”.

The Franco-German relationship has been under strain recently, largely due to the two countries’ diverging analyses of the economic situation. The French national debt, which far exceeds the limits set out in the European treaties, could lead to the imposition of financial sanctions, a measure backed by the German Commissioner Günther Oettinger.

“We have to make Europe take more risks. We need to strengthen the common economic area, particularly with regard to tax,” the President said.

France to become Europe’s biggest country by 2050

Hollande also highlighted the demographic challenges the two countries face.

“France will be Europe’s most populated country in 2050,” he said. He added that Germany needed France for this very reason, a fact that the German Chancellor had already acknowledged, saying that Germany would lose millions of workers over the same period.

François Hollande said “my relationship with Ms. Merkel is based on order, sincerity and honesty, we face the same challenges, we share the same interpretation of the facts: we want Europe to make stronger choices,” adding that “Europe should become a place of conviction”.

On immigration, the French President said “today it is Germany and Sweden that are making the greatest efforts to accommodate Syrian refugees, not France”. He also stated that Europe should tackle the situation with a coordinated asylum policy. “We have set up Frontex […] but we expect Europe to help solve the crises” that lead to immigration, the President said.

Advocating a broader FTT

Hollande also spoke about the Financial Transaction Tax, a common tax that remains a bone of contention between the 11 countries that are trying to implement it, calling for its scope to be widened.

He said he had asked Michel Sapin to “call a meeting of the Finance Ministers of the 11 countries in January, to put the Financial Transaction Tax (FTT) into place. We must tax all financial products at a low rate, and the tax base must be a broad as possible”.

The French position on the FTT is seen by some as a timid one; they advocate a mini-tax of 0.01% on derivative products and 0.1% on shares.

 >> Read: France tries to unblock European FTT negotiations

Background

The excessive deficit procedure is laid out in article 126 of the treaty on the functioning of the European Union. This article obliges the member states to avoid excessive deficits in national budgets.

The European Commission evaluates the data and the Council - representing the 28 EU member states - decides what constitutes an excessive deficit.

The Commission then puts together a report, taking into account all the factors (economic conditions, reforms, etc.) that may be relevant in deciding whether the deficit is excessive.

If the Council deems a member state's deficit to be excessive, it begins by making appropriate recommendations. The state concerned then has a precise timescale in which to bring the situation under control.

If the state does not conform to the recommendations, the Council give them formal notice to take measures to reduce the deficit.

If required, the Council is able to hand out sanctions or fines, or to invite the European Investment Bank to review its lending policy regarding the state concerned.