TOULON, France (MNI) – France and Germany must together blaze the
trail to a new Europe with greater solidarity and budget discipline that
can resist the speculation of financial markets, French President
Nicolas Sarkozy said Thursday.
“If we want Europe to survive, we have no choice: we must
impose infallible solidarity on all those who doubt the viability of the
euro, who speculate on its implosion,” Sarkozy said.
It must be “absolutely clear” that the case of Greece is an
exception and that in the future no Eurozone government will default on
its debt, he insisted. “It’s a matter of confidence.”
Long on rhetoric and short on concrete measures, the president
offered a vision of a future Europe where the external borders are
protected against social dumping and member states, taking decisions
with qualified majorities, institute a “true economic government” with a
common agricultural policy and an industrial strategy to restore
competitiveness.
For members of the Eurozone there will be a bailout fund with
sufficient resources to dissuade market speculation, he promised. To
ensure budget discipline, there must be tougher, more rapid and more
automatic sanctions against fiscal waywards.
According to press reports, one reason Sarkozy held off on specific
proposals for the debt crisis is that there are still differences to be
ironed out with Germany.
Yet the two countries must be close enough to a new strategy that
Sarkozy could announce that Chancellor Angela Merkel will come to Paris
on Monday to make joint proposals “to guarantee the future of Europe.”
France and Germany will form the “pole of stability and confidence” on
which a new Europe can be founded, he pledged.
On the divisive issue of the central bank’s role in overcoming the
crisis, Sarkozy stuck to his guns: “Naturally the European Central Bank
has a decisive role to play.” Side-stepping the debate over the ECB’s
statute and mandate, he underscored his conviction that the central bank
“will act in the face of the risk of deflation that is endangering
Europe,” but left it to “independent” monetary authorities to decide
when and how.
With the presidential election only six months away, Sarkozy
profited from the media attention to denounce proposals of his future
campaign opponents to abandon nuclear energy, regularize illegal
immigrants or give up France’s seat on the UN Security Council.
There were also hints about the direction of policy in the near
term and kinds of proposals that will buttress the incumbent’s campaign
platform.
France must fight its way out of the crisis not by imposing
crippling austerity measures, but rather by working harder and longer
and investing in a “new growth model” for the future, where
intelligence, innovation, quality and immaterial production will be
basis of competitiveness and the government will lead the way as
“entrepreneur”, he argued.
Unions and employers will be convened in January to explore ways to
render the economy more competitive, he said.
At the same time, the government must continue to cut spending —
especially “bad spending” — and reduce the number of civil servants, he
stressed, arguing that social spending can no longer be financed solely
by taxing labor.
Sarkozy also recalled with evident satisfaction that three years
earlier at the outset of the financial crisis he had warned — in the
very same auditorium of this southern French city — of the gravity of
the situation and the need to “reform capitalism” and “moralize”
financial affairs.
The president continued to denounce the “financial globalization”
that had created “a gigantic global machine to fabricate debt.” But he
also underscored that France could escape the pressure of markets only
by reducing its deficits and debts in cooperation with its European
partners. Otherwise it could “lose control over its destiny.”
“The crisis is not over,” he said, warning that if France and
Europe do not adapt, they could be relegated to dustbin of history.
— Paris Bureau: 331 4271 5540; email: ssandelius@marketnews.com
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