Hollande won support from Germany's opposition Social Democrats (SPD), who vowed to use their parliamentary blocking power to delay ratifying a European budget discipline treaty until Merkel accepts accompanying measures to boost growth and jobs. "I will propose to our partners a pact that will tie the necessary reduction of our public debt to the indispensable stimulation of our economies", the Socialist president said.
Markets and policymakers are watching the dialogue between the conservative German chancellor and the centre-left French leader for signs that they can overcome their differences on Merkel's drive for austerity and lead the eurozone together.
Declaring that Europe needed "projects, solidarity and growth", Hollande added a protectionist note that found wide support during the presidential election campaign, but may worry France's EU partners to whom he addressed it. "I will tell them of the need for our continent, in such an unstable world, to protect not only its values but also its interests in the name of reciprocity in our trade relations", he said.
Hollande has said he will press Berlin to lift its veto on issuing common eurozone bonds to harmonise borrowing costs within the currency area, or to allow the European Central Bank to lend directly to governments. Both ideas are "red lines" for the centre-right German government, although Merkel has not ruled out eurozone bonds as a long-term prospect if Europe takes more steps towards a tighter political and fiscal union.
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