10 Jul 2012

Cameron, Hollande and the red carpet détente

The smiles are strained and the body language stiff but Conservative David Cameron insists he has much in common with Francois Hollande – the Socialist he refused to meet during France’s elections.

A guard of honour greeted President Francois Hollande on his first presidential visit to the UK – a stark contrast to February when Mr Cameron snubbed the Socialist leader and voiced his support for opponent Nicolas Sarkozy.

The prime minister inflamed the situation further after the French election when he promised to “roll out the red carpet” for any tax exiles seeking to flee higher duties imposed by Mr Hollande’s government.

The leaders steered away from thorny issues on Tuesday. There was no indication they debated how to rein in London’s banks, how to resolve the euro crisis or Mr Hollande’s plans to increase the levy on foreign-owned second homes that would affect 200,000 Britons.

Instead, Mr Cameron and Mr Hollande found common ground discussing foreign policy and defence co-operation between the UK and France.

They agreed measures to deal with the economic crisis should be implemented “rapidly” and that the European Commission’s proposal to increase Brussels’ spending by 14bn euros a year were “unacceptable”. Trade was another safe topic.

Fair trade

“Our economies are closely interwoven. French companies employ 180,000 people across the UK and we export more to France than to China, India, Japan and Turkey combined,” Mr Cameron said at a joint press conference following a working lunch.

The strained cordiality was designed to mend fences after a particularly difficult few months of finger-pointing and rhetoric.

Mr Cameron refuses to back some of the eurozone ideas that may compromise the City of London’s position as Europe’s leading financial centre, and has regularly voiced his fierce opposition to a financial transactions tax desired by Paris. Furthermore, Britain has not ruled out a referendum on whether the UK should redefine its relationship with Brussels.

‘Indifferent’ Britain

Mr Hollande has previously described Britain under Mr Cameron as “indifferent” to the fate of the eurozone and attentive only to the interests of the City. He presented a more conciliatory tone today, however.

Speaking though an interpreter, Mr Hollande said he understood Britain did not intend to join the eurozone while France wants integration and solidarity.

“We should see Europe as having different speeds and each can act at its own speed, while respecting the other countries,” he said.

Cheese tax

Franco-British spats are hardly unique. The prickly relationship has been ongoing for hundreds of years. France twice vetoed Britain’s application to join the European common market before relenting in 1973.

The rhetoric increased in the last year with France and Britain trading barbs about debt levels. In November, Mr Cameron speculated in front of Britain’s parliament whether the French would accept “a tax on cheese”.

In December, French officials lashed out at Britain to deflect concern about a looming cut in the country’s AAA credit rating.

Red carpet

Chancellor George Osborne in June accused the eurozone debt crisis of “killing off” the British economic recovery.

“Despite the eurozone crisis, Germany, France and the euro area as a whole have so far avoided recession while Britain’s recovery was choked off in the autumn of 2010,” Mr Osborne wrote in an article in The Sunday Telegraph.

Mr Hollande was scheduled to meet the Queen on Tuesday afternoon in a private visit rather than a formal occasion, thus no need for Windsor Castle to roll out the red carpet just yet.