15 May 2012

Francois Hollande’s plane struck by lightning

Foreign Affairs Correspondent

As newly-inaugurated French President Francois Hollande makes his way to Berlin for his first foreign visit, he is forced to turn back after his plane is hit by lightning.

An unharmed President Hollande returned to France, where he changed planes and set off again for Germany.

He is meeting Chancellor Angela Merkel and said at his presidential inauguration that he will press Europe’s leaders to adopt a pro-growth strategy.

President Hollande signalled his impatience with the austerity measures adopted in the EU and said growth was needed as well.

In Greece, talks to form a new government failed following inconclusive election results and nine days of negotiations, and there will be a new poll in June, with anti-austerity parties expected to reap dividends.

France’s first socialist president since Francois Mitterrand will urge the conservative chancellor to adjust the fiscal compact agreed by European leaders to include a pro-growth commitment.

“I will propose to my European partners a pact that ties the necessary reduction of deficit to the indispensable stimulation of the economy,” he said.

Common approach

Although the German government has long argued that there is no alternative to austerity, a key Merkel ally said on Tuesday that a common approach to combating the crisis in the eurozone could be agreed by the end of June.

Peter Altmaier, parliamentary whip for Chancellor Merkel’s Christian Democrats, said: “It is important that we study each others’ proposals. But I am sure that we will be able to agree a common Franco-German approach by the end of June at the latest.”

Germany’s opposition Social Democrats, emboldened by President Hollande’s victory over Nicolas Sarkozy in France, said they would only support the fiscal compact if it was accompanied by measures to boost growth and jobs.

Discipline

The fiscal compact is meant to discipline eurozone countries that are deemed to be spending beyond their means and is a response to the bailouts that had to be provided to Greece, Portugal and Ireland to keep them going.

President Hollande’s meeting with Chancellor Merkel coincides with failed talks in Athens convened by the Greek president aimed at forming a new coalition government.

With EU and IMF-approved spending cuts making life increasingly tough for the Greek people, anti-austerity parties benefited in May’s elections and are likely to do even better in June’s poll. The cuts are the price Greece is being asked to pay in return for bailouts from the EU and IMF.

Official figures released on Tuesday show that while the eurozone economy did not grow in the first three months of 2012, gross domestic product rose in Germany by 0.5 per cent, higher than economists had expected.

Greece is in its fifth consecutive year of recession and there are fears for its membership of the euro if it ditches austerity. This would have ramifications for other members of the single currency, notably Spain and Italy.