French President François Hollande met yesterday (14 June) with Italian Prime Minister Mario Monti, making it clear he was building alliances with leaders in Rome and Madrid who back his challenge to German-imposed austerity.
Hollande displayed his like-mindedness with his Italian host, the French press reported, while his delegation showed optimism about the chances of success of the 28-29 June EU summit. The meeting is expected to produce a “calendar for more EU integration” and measures on fiscal discipline and growth.
Hollande submitted to Monti the details of his own proposals for the June summit, which have already been submitted to European Council President Herman Van Rompuy.
Three principles are the backbone of this proposal, Hollande said, enumerating the return to growth, financial stability and, over the longer term, the deepening of the economic and monetary Union.
"We need imagination and creativity to find new financial instruments," the French president said in Rome at a news conference with Monti.
He repeated his ideas, mentioning the introduction of eurobonds, which Germany opposes in the absence of common economic governance in the eurozone. Hollande also called for the bloc's ESM permanent rescue fund, which is due to start operation next month, to be given a banking license to allow it to borrow money from the ECB to bolster its firepower.
"To deepen financial union, there are many options such as a financial transactions tax and joint debt issuance, including eurobonds, euro bills or a debt redemption fund," Hollande said.
Monti said he shared these objectives, adding that the remaining disagreements were “purely technical”.
A meeting in Rome of Monti, Hollande, as well as German Chancellor Angela Merkel and Spanish Prime Minister Mariano Rajoy is expected to help move toward a compromise – and a consensus.
International media reported that Hollande is discarding diplomatic codes as he resets relations with a politically weakened German government.
The Socialist is taking his own stand on solutions to the eurozone crisis where for years Paris stood alongside Berlin. Just a month into his presidency, Hollande risked offending Germany's centre-right chancellor by inviting the leaders of the opposition Social Democrats (SDP) to the Elysée palace on 13 June to discuss eurozone policy.
The informal meeting, after the SPD leaders met more publicly with Prime Minister Jean-Marc Ayrault, was a break with protocol. A new president would normally play host to the chancellor before there could be any question of meeting opposition politicians.
Reuters reported that Hollande's move was partly a payback for Merkel's refusal to meet him when he was running against conservative predecessor Nicolas Sarkozy.
France's opposition figures claimed the meeting weakened bonds with Germany.