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ECONOMICS > Germany, France hold ‘fruitful’ talks

BERLIN - Reuters

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Chancellor Merkel says the eurozone crisis cannot be solved with quick fixes such as issuing euro bonds. Conflict of solutions heated up French-Germany ties last week.

Chancellor Merkel says the eurozone crisis cannot be solved with quick fixes such as issuing euro bonds. Conflict of solutions heated up French-Germany ties last week.

French President François Hollande and German Chancellor Angela Merkel on June 16 held “constructive and fruitful” phone talks on the crisis in Greece and the eurozone, Hollande’s office said.
They exchanged “views on the situation in Greece, the preparations for a G20 summit and the next European Council meeting on June 28 and 29,” a statement said.

The talks come on the eve of the Greek elections, deemed crucial for the future of the eurozone, and follow a tense week between Paris and Berlin, as France’s new Socialist government tries to find common ground with Merkel, a center-right, pro-austerity champion.

Earlier last week Merkel irritated some partners by calling proposed solutions to the crisis quick fixes smacking of “mediocrity” that failed to address core problems.

French Prime Minister Jean-Marc Ayrault responded by urging Merkel to avoid “simplistic talk”. Ayrault seemed to smooth things over Friday, saying Berlin and Paris should work “hand-in-hand for a solution to pull Europe out of crisis”, and calling for stronger contacts with Berlin.

 “Without growth, even if you move to reduce debt, you won’t be all right,” Ayrault said.

 He added it was necessary to find “strong initiatives for growth and to develop effective financial stability mechanisms.” A strong Franco-German partnership has been considered key to progress and problem-solving in the 17-nation eurozone, and the wider European Union, in the past.

Hollande proposes 120 bln euro growth pact 

Separately, Hollande has proposed a 120 billion euro ($152 billion) “growth pact” ahead of key talks with eurozone leaders, newspaper Le Journal du Dimanche reported yesterday.

In a letter sent to fellow European leaders last week, a copy of which the newspaper said it obtained, Hollande proposed a series of measures including a financial transaction tax and investment to boost job creation.

It was sent as Hollande prepares to embark on a series of talks where he aims to shift the focus of eurozone economic policy from austerity to growth, culminating in a European Union summit on June 28-29 in Brussels.

June/18/2012

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