French Presidential Candidate Hollande 'They'll Have to Listen to Me'
Part 2: 'We Need European Bonds'
SPIEGEL: You reproached Sarkozy for France having gone into "submission" towards Germany.
Hollande: I think that France has not made it clear enough recently to our German friends how important it is to introduce euro bonds as a tool against speculation. And how the necessary budget discipline needs to be accompanied by growth. And it is undoubtedly because my country is dealing with an alarmingly high deficit and a degradation of its rating by one agency, which wasn't good for an even balance of power.
SPIEGEL: How do you intend to reestablish it?
Hollande: A newly elected president with a full term in office clearly carries more weight than a president at the end of his term. If the French people affirm my position, which I have stated clearly, the other countries will have to pay attention to it. For this reason, I wanted to send a very early warning to the other leaders. They'll have to listen to me.
SPIEGEL: Are you saying that, because of your newly minted credentials, you'll be able to impose a change of course on the rest of Europe?
Hollande: Not impose! No one imposes things on anyone in Europe. That's not my notion, nor is it my temperament. The EU has always functioned under the banner of respect, equilibrium and trust. But we won't reach our goals without renegotiating. Who seriously believes -- aside from a few people in Germany, perhaps -- that we can reduce our deficits if there is no growth?
SPIEGEL: But Mrs. Merkel doesn't dispute the need for growth. The debate revolves around which path we should pursue to attain that growth.
Hollande: All the better! That means we already have some common ground to start from.
SPIEGEL: The chancellor believes that the fiscal pact is the only way Europe can reduce its debt and save the euro. What don't you like about it?
Hollande: I want to renegotiate it. Not all of it -- some things seem reasonable to me. I've already committed myself to a balanced budget and better economic governance. But what bothers me most is that there is nothing about growth in the fiscal pact. And then there is some uncertainty with regard to the automatic sanctions -- that is, what is expected of countries to reduce their deficits.
SPIEGEL: Then what exactly do you want to achieve?
Hollande: Some provisions should be renegotiated. Take, for example, the role of the European Court of Justice. I'm opposed to it having the power to intervene on national budget votes. No parliament can agree, in my eyes, to be subordinated to a court.
SPIEGEL: And what about the automatic penalties for violations?
Hollande: They are necessary. What we experienced with the Maastricht Treaty cannot be allowed to happen again.
SPIEGEL: Then why don't you want a balanced budget amendment, a so-called debt brake, anchored in the French constitution?
Hollande: Not in the constitution, but I would propose a law to the French parliament that provides for reducing the budget deficit year by year, until we have reached a balanced budget by 2017.
SPIEGEL: But you can't magically bring about growth by decree. And the EU countries have no money for economic stimulus programs, which have often fallen flat in the past, anyway.
Hollande: Yes, our countries have no leeway, except Germany.
SPIEGEL: If you feel that Germany is supposed to be the engine, then you're asking too much of your partner.
Hollande: You've significantly reduced the deficit in Germany. And you still have growth reserves. The German trade unions are in the process of negotiating wage increases. Greater purchasing power would spur domestic demand in Germany, from which we can also benefit.
SPIEGEL: And where is the money with which you want to stimulate the economy supposed to come from?
Hollande: There are a few structural funds in the EU that still have unused money in them. We also have the European Investment Bank.
SPIEGEL: Whenever the EU pays, Germany always has to pay the most.
Hollande: That's why we need European bonds. Then Europe as an institution could borrow money to initiate growth projects, with that money coming from the savings of its people.
SPIEGEL: Mrs. Merkel is opposed to euro bonds, partly because Germany would then have to pay higher interest on its debt.
Hollande: I don't want euro bonds that serve to mutualize the entire debt of the countries in the euro zone. That can only work in the longer-term. I want euro bonds to be used to finance targeted investments in future-oriented growth projects. It isn't the same thing. Let's call them "project bonds" instead of euro bonds.
SPIEGEL: Now you don't sound as radical as you did at first. Did you choose the wrong word when you called for renegotiation?
Hollande: The incumbent (Sarkozy) was the one who negotiated this treaty, but the parliament hasn't ratified it yet. I want to change a few items, not tear up the entire pact. But I do want an addendum on the subject of growth, and it ought to be written into the pact.
SPIEGEL: Even German Social Democrat Peer Steinbrück (a possible candidate for chancellor in the next German election) has called your request "naïve."
Hollande: (German Opposition leader Frank-Walter) Steinmeier and (SPD Chairman Sigmar) Gabriel have since said that wanting to realign the construct of Europe is not naïve. In an election, one needs both hope and audacity.
SPIEGEL: In the last few years, Europe was practically controlled by a German-French directorate, the "Merkozy" tandem. Will this continue with a "Merlande?"
Hollande: We're not quite at the point yet at which we combine our last names. I'm not a lukewarm European. I know that the German-French friendship is indispensable, no matter who the countries' leaders are. But we cannot create the impression that there is a duopoly in Europe that everyone else must follow. Many countries can't accept this -- not the fact that there is a leadership, but that decisions are imposed on them.
- Part 1: 'They'll Have to Listen to Me'
- Part 2: 'We Need European Bonds'
- Part 3: 'There Will Be a Balanced Budget at the End of My Term'