“What concerns us is not what is in the treaty, it is what is not in the treaty”, Michel Sapin, a former finance minister who is Mr Hollande’s policy chief, said. However, he was emphatic that the agreement as it stood does too little to ensure Europe will escape an austerity trap. “A treaty that is based only on budgetary discipline is a treaty that will drive Europe to the wall”, he said. Achieving growth “is the only way to counter unemployment and at the same time start to reduce deficits and debt under socially and politically acceptable conditions”.
Mr Hollande was fully committed to his pledge to reduce France’s deficit to 3 per cent of gross domestic product in 2013 and eliminate it in 2017, which conforms with targets set in the fiscal pact, Mr Sapin insisted. “He is not saying we must renegotiate the budgetary discipline.”
The suggestion that Mr Hollande, if he beats Mr Sarkozy in the final round of the election, would be satisfied with some kind of addition to the treaty to inject measures to boost growth will ease concerns, especially in Berlin, of a potentially damaging new battle over the accord.
Mr Hollande would also reopen the issue of giving the European Stability Mechanism, the eurozone rescue fund that will be in place from July, the status of a bank so it had recourse to the ECB for funding, Mr Sapin said. Mr Sarkozy’s efforts on that front were firmly rebuffed by Ms Merkel. “Our aim is not to have a confrontation with Germany, it is to find what unites the two cultures and permits them, with a single currency, to have policies which point in the same direction”, said Mr Sapin.
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