French President calls for euro zone government

French President Francois Hollande meeting German Chancellor Angela Merkel in Paris earlier this month. Mr Hollande says Europe has let its institutions become weaker and that there should be a "government of the euro zone (with) a specific budget as
French President Francois Hollande meeting German Chancellor Angela Merkel in Paris earlier this month. Mr Hollande says Europe has let its institutions become weaker and that there should be a "government of the euro zone (with) a specific budget as well as a parliament to ensure its democratic control".PHOTO: BLOOMBERG

PARIS • French President Francois Hollande has called for the creation of a euro zone government and for citizens to renew their faith in the European project, which has been weakened by the Greek crisis.

Reviving an idea first mooted by former European Commission chief Jacques Delors, Mr Hollande on Sunday proposed "a government of the euro zone (with) a specific budget as well as a parliament to ensure its democratic control".

He said the 19 euro zone states had chosen to join the monetary union because it was in their interests and no one had "taken the responsibility of getting out of it".

"This choice calls for a strengthened organisation, an advance guard of the countries who will decide on it," he said, calling it "a vanguard of countries".

The euro zone's members are united in the informal Eurogroup, which comprises each country's finance minister.

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This choice calls for a strengthened organisation, an advance guard of the countries who will decide on it... What threatens us is not an excess of Europe but its insufficiency.

FRENCH PRESIDENT FRANCOIS HOLLANDE, calling for the creation of a euro zone government

"What threatens us is not an excess of Europe but its insufficiency," Mr Hollande wrote in the Journal du Dimanche.

He said Europe had let its institutions become weaker and admitted the EU's 28 members were "struggling to find common ground to move forward. Parliaments remain too far away from decisions. And people are turning away after having been bypassed so much".

He said populist movements had seized on Europeans' disenchantment with their institutions and were taking issue with Europe because "they are scared of the world, because they want divisions, walls and fences to return".

French Prime Minister Manuel Valls said Mr Hollande's "vanguard" should include the six founding EU countries: France, Germany, Italy, Belgium, the Netherlands and Luxembourg.

But Mr Hollande's call drew immediate criticism from his predecessor Nicolas Sarkozy, head of France's main centre-right opposition party and a possible candidate in the 2017 presidential polls. "I do not think we need one more parliament," he said. "We need to coordinate economic policies to be much stronger, we need a French economic policy that is not in contradiction with the economic policy of the other euro zone countries."

Mr Hollande's remarks touched on what analysts see as a major flaw in the euro. Under the 1992 Treaty of Maastricht, countries with a common currency must obey rules on borrowing and deficit spending. But the Greek crisis saw one member notch up successive worsening deficits and amass a mountain of debt. Critics say the problem stems from a lack of centralised control over national fiscal policies, which today are jealously guarded areas of sovereignty.

REUTERS, AGENCE FRANCE-PRESSE

A version of this article appeared in the print edition of The Straits Times on July 21, 2015, with the headline 'French President calls for euro zone government'. Print Edition | Subscribe