Guardian: Hollande fires warning shot at Merkel over austerity on eve of EU summit

17 October 2012

François Hollande warned for the first time that the Paris-Berlin motor driving Europe could stall over deep differences on how to resolve the euro crisis, insisting on a climb-down by Angela Merkel in her emphasis on austerity and the surrender of national powers to tighten fiscal discipline.

Hollande said there was light at the end of the eurozone tunnel, but he also:

• suggested Merkel was too preoccupied with domestic politics in her response to the crisis
• demanded Berlin reverse its opposition to decisions taken by eurozone leaders in June
• called on the eurozone to act promptly to bring down the costs of borrowing for Spain and Italy
• insisted Greece be assured of staying in the eurozone
• gave short shrift to a German push for the creation of a federalised eurozone or political union
• and dismissed as unfounded the strong German criticisms of the recent moves on the crisis by the European Central Bank.

While the Franco-German relationship was the driving and "accelerating" force of the EU, Hollande said, "it can also be the brake if it's not in step. Hence the need for Franco-German coherence".

Hollande's remarks on the eve of a crucial EU summit in Brussels highlighted the extent of the gulf between Paris and Berlin and the deep divisions within the eurozone almost three years into Europe's worst ever crisis.

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