May 26, 2012
How quickly François Hollande is changing the terms of European politics. When he spoke about the need for more growth, others quickly echoed him. And now that the new French president is talking about the need for Eurobonds, even the IMF and the OECD have joined the chorus of those demanding joint euro-zone debt issuance. At his first European Union summit, over an informal dinner in Brussels on May 23rd, Mr Hollande found more allies. Predictably, though, he ran into firm opposition from Germany.
That did not seem to bother him. Finding agreement can wait for the next summit, in late June, if not later. For now Mr Hollande was demonstrating that he was different from his predecessor, who stood on the same podium in Brussels in March. Before every summit Nicolas Sarkozy would seek a common position with the German chancellor, Angela Merkel. By contrast Mr Hollande chose to meet the Spanish prime minister, Mariano Rajoy, before the pair took the train (not the presidential jet) to Brussels.
Mr Hollande was all too happy to highlight his differences with the chancellor. “For Mrs Merkel Eurobonds are the end point of a process of integration. For me they are the starting point,” he declared. This is a striking change of tone from the election campaign, when Mr Hollande, though critical of Mrs Merkel’s brand of austerity, seemed keen to find an accommodation. He flew to Berlin within hours of his inauguration. Most of his calls for growth-inducing European investment seemed modest, based on existing proposals by the European Commission. When he spoke of “Eurobonds”, he had once suggested that he merely meant “project bonds”, a scheme to sweeten debt issued by private firms to finance EU-backed infrastructure projects.
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