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Emmanuel Macron makes case for ‘ambitious’ overhaul of eurozon

By 13/09/2017 No Comments

French president on Greek trip stresses financial solidarity with bloc’s weaker members

epa06184828 French President Emmanuel Macron delivers a speech at the Elysee Palace during Prefects Reunion in Paris, France, 05 September 2017. EPA/ETIENNE LAURENT MAXPPP OUT

Emmanuel Macron has made the case for an overhaul of the eurozone during a two-day state visit to Greece, calling for reforms that showed “maximum ambition”. The French president and his wife travelled to Athens with about 40 French executives on a visit designed to mark Greece’s relative return to normality after the eurozone crisis. Mr Macron, who wants more investment and a common budget to help prevent renewed existential crises in the bloc, emphasised the need for more financial solidarity with weaker members of the eurozone, saying the Greek people had “paid a very high cost”. The eurozone needed to “become more integrated” and “get out of this sort of internal civil war whereby everyone looks at their little differences”, he said. “Everyone needs to reform but that implies solidarity.” Mr Macron also urged the EU to “ease the burden” of Greece’s sovereign debt, a longtime demand of Athens that has been resisted by Germany. The French president is pushing for the EU to adopt tighter labour rules, more protective trade tools and more stimulus, in exchange for more budget discipline at home and deregulation in the French jobs market — a bargain that Germany is showing signs it might consider. Mr Macron has said he would like each country’s contribution to the future eurozone budget to amount to “several” gross domestic product percentage points. The bloc had to “get its independence back” by setting up its own European monetary fund to help prevent crises, he said in Athens — lashing out at the role of the International Monetary Fund in tackling the eurozone debt crisis. “As far as I am concerned, the IMF had no place in EU affairs,” Mr Macron said. Mr Macron’s arrival in Greece comes after Athens’ €3bn bond offering, which was more than twice subscribed. Alexis Tsipras, the Greek prime minister, hailed the sale on July 28 as “the most significant step towards ending this unpleasant adventure of the memorandum [bailout]”. The leader of the ruling leftwing Syriza party, who is battling criticism at home over increases in tax and social security contributions imposed by its bailout creditors, is counting on Mr Macron’s visit to boost his popularity and highlight the changing mood among EU partners. The economic outlook in Greece is brightening. Growth of 1.8 per cent is expected this year, after seven years of recession that saw a 25 per cent decline in national output. However, unemployment, which has declined marginally this year, remains the highest in the eurozone at 21.7 per cent. The government has failed to meet privatisation targets set in its bailout programme and struggled to attract substantive private investment from abroad. The opposition centre-right New Democracy party — whose leader, Kyriakos Mitsotakis, will also meet Mr Macron — holds a double-digit lead over Syriza in opinion polls.“The [Greek] government sees this as the moment when Mr Macron should reaffirm support for Greece in Europe and for French investors to step in to balance the German and Chinese presence,” said Costas Iordanidis, a writer and political commentator.

Posted in: Financial Times