France’s President François Hollande has insisted that the European Union needed more solidarity and a system for debt mutualisation, a position which fell foul of Germany’s insistence that this should only happen after countries agree to greater fiscal oversight from Brussels. EURACTIV France reports.
“The roadmap for the deepening of the economic and monetary union, which we are going to discuss here at the end of the year, is a first step in that direction,” Hollande said Monday (27 August) in a speech at the annual Ambassador’s Conference in Paris.
“This deepening must allow us to put in place instruments of solidarity. Ultimately, I think the budgetary union should evolve towards debt mutualisation”, he went on to say.
The French president has previously championed joint “eurobonds” to bring down borrowing costs for the weaker eurozone countries as the guarantors would include the strongest states – Germany, in other words.
Concerned that Germany will end up footing the bill, Chancellor Angela Merkel has strongly opposed debt mutualisation, citing the need for prior “improved controls and structural measures”, adding "joint liability can only happen when sufficient controls are in place."
Hollande also called for the quick implementation of decisions taken by EU leaders on 28 June, which highlighted the need for greater "fiscal and political integration".
“There is an agreement that the European Stability Mechanism, in cooperation with the European Central Bank, can intervene to reduce the interest rate for sovereign debts when they become prohibitive,” Hollande said, signalling he was in favour of debt buybacks, which could help ease Spain and Italy’s financial woes.
Hollande also called for a strengthening of the Eurogroup 17, proposing the heads of state “meet more regularly when it comes to the eurozone, and not just twice a year.”