French President Francois Hollande said on Saturday he would make proposals for eurobonds at an upcoming European summit as he outlines his ideas to stimulate growth and help ailing economies within the eurozone.
“I will outline all growth proposals at this informal meeting on May 23,” Hollande told reporters at the end of a G8 leaders’ meeting in Camp David. “Within this packet of proposals there will be eurobonds and I will not be alone in proposing them. I had confirmation on this at the G8.”
The Brussels meeting is expected to focus on the French president’s call for measures to kick start growth across the 27-country bloc, especially in the 17-nation euro zone, while maintaining efforts to cut budget deficits.
Photo: Reuters
Hollande has said he will press Berlin to lift its veto on issuing common eurozone bonds — debt issued for the whole currency and implicitly guaranteed by countries such as Germany, or to allow the European Central Bank to lend directly to governments.
Both ideas are “red lines” for the center-right German government, although German Chancellor Angela Merkel has not ruled out eurozone bonds as a long-term prospect if Europe takes more steps towards a tighter political and fiscal union.
Hollande appeared to have had a political success at the G8, with the leading global industrialized nations, including the US, Russia and Germany, agreeing to balance austerity with a new dose of US-style stimulus.
“We had a frank discussion on growth, but budgetary commitments are not under question. There’s no reason to think any country was isolated,” Hollande said when asked if the meeting had marginalized Merkel.
“If we want to move forward we have to do it with everybody that counts in Europe, Germany naturally, but also the rest of the world,” he said.
Meanwhile, Hollande will meet with German and Italian leaders at a summit in Rome next month, Italian Prime Minister Mario Monti said on Saturday.
The meeting will take place before the June 10 and 17 legislative elections in France, Monti said on the sidelines of the G8 summit.
The three-way event is expected to focus on the eurozone’s deepening crisis amid fears that Greece may be forced to quit the euro, sending shockwaves around the bloc and endangering major economies.
“We should not just wait for structural reforms and the reduction of deficits to generate growth,” Monti said.
He urged EU leaders meeting for a Wednesday dinner ahead of a formal summit at the end of next month to “identify concrete paths, like reinforcing the capital of the European Investment Bank, project bonds and an evolution toward eurobonds.”
Monti said he was “confident about the options” that emerged after G8 leaders agreed they needed to take measures to shore up consumer confidence and boost economic recovery.
G8 leaders earlier backed a “strong and cohesive” eurozone, that should retain Greece, and committed to boosting growth and demand, alongside measures to fix debt-laden fiscal balance sheets.
Reflecting differences on strategy to fight the lingering economic crisis, the leaders said in a statement that “the right measures are not the same for each of us.”
Fears that debt-stricken Greece may be headed for a chaotic eurozone exit loomed large as the G8 leaders gathered for the crisis talks.
The G8 top economies come together as Greece faces its second election in just six weeks, putting its eurozone future in doubt and dragging down Spain, where the government is struggling to keep its banks afloat.
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