This Article is From Oct 17, 2012

French President Hollande says end of euro crisis 'very close', warns Germany

French President Hollande says end of euro crisis 'very close', warns Germany

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Paris: French President Francois Hollande said on Wednesday the end of the eurozone crisis is "very close" but warned Germany to stop thinking Berlin should have the only say on how to tackle Europe's debt woes.

In an interview with Le Monde and five other European newspapers ahead of a key summit of EU leaders starting on Thursday, Mr Hollande repeated his insistence on pooling eurozone debt despite German opposition and said Chancellor Angela Merkel was preoccupied with domestic concerns.

"On the exit from the eurozone crisis, we are close, very close," Mr Hollande said. "This is because we took the right decisions at the summit of June 28-29 and because it is now our duty to apply them rapidly."

Mr Hollande said the Greek debt situation was being dealt with "definitively" as the country "has made so many efforts and must be assured of remaining in the eurozone."

Steps agreed at the June summit including a deal on a banking union had shored up the eurozone and needed to be finalised "by the end of the year," Mr Hollande said.

"The worst -- in the sense of the fear the eurozone would break up -- is over. But the best is not here yet. It's up to us to build it," he said.

Mr Hollande said the EU has to ensure countries that have made painful efforts to reform their finances are rewarded with lower interest rates, reiterating that he favoured a partial pooling of debts through eurobonds.

Germany has fiercely opposed mutualising debts but Mr Hollande said the voices of other eurozone nations needed to be taken into account, especially after the creation of its new rescue fund, the European Stability Mechanism (ESM).

"We are all taking part in this solidarity, not only the Germans!" he said. "Let's stop thinking that there is only one country that is going to pay for all the others. That's false.

"I know the sensitivity of our German friends to the problem of supervision. Whoever pays should control, whoever pays should sanction. I agree. But budgetary union must be completed by a partial pooling of debts through eurobonds."

Mr Hollande also appeared to take Ms Merkel to task for putting her domestic interests above those of Europe.

"She is very sensitive to domestic political questions and the demands of her parliament. I understand that, we all are. We all have our public opinion, our democratic debates. But our common responsibility is to put Europe's interests first."

He hailed Franco-German cooperation in reforming the eurozone, but warned that "it can also be a brake if it's not in step."

Mr Hollande said austerity alone was not the answer to the eurozone's woes, urging governments to take measures to boost growth.

"Countries that are in surplus need to stimulate domestic demand by increasing salaries and reducing levies, that is the best expression of their solidarity," Mr Hollande said. "Recession is as much a threat today as deficits."

Mr Hollande said he wanted to see progress towards eurozone-wide regulation of the banking sector before the end of the year, as a prelude to greater shared decision-making in all areas of economic and monetary policy.

"We can then begin changing our decision-making methods and the deepening of our union. This will be the big area to work on from the beginning of 2013."

But he said he didn't expect to see steps to closer political union in the European Union until after the 2014 elections to the European Parliament.

"The stakes of this consultation will be the future of the EU," Mr Hollande said.

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