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Recession is 'threatening the identity of Europe': Hollande

French president outlines bold plan for full political union within the beleaguered euro zone as France slips back into recession.Colin Randall reports from Marseille

MARSEILLE // Facing hostility at home and rising tension with Germany as Europe suffers the ravages of economic crisis, the French president Francois Hollande used a rare news conference yesterday to insist the worst was over.

One day after his anniversary of taking office, which bleakly coincided with France slipping back into recession, Mr Hollande also outlined a bold plan for full political union within the beleaguered euro zone.

The president warned that recession was beginning to "threaten the very identity of Europe".

In a further challenge to the policies of the German chancellor, Angela Merkel, he put the blame for the crisis on the austerity measures she strongly favours.

This echoed controversial comments by Pierre Moscovici, Mr Hollande's finance minister, who also held austerity responsible for France's economic woes.

Mr Hollande called for a central economic government for the single-currency area with a full-time president, its own budget and a harmonised tax system.

Little of this is likely to appeal to Berlin. The contrast for those recalling how closely Mr Hollande's conservative predecessor, Nicolas Sarkozy, worked with Mrs Merkel in seeking to grapple with crisis could not be more stark. Mr Sarkozy himself has accused Mr Hollande of undoing all the progress he claims to have made with the German chancellor.

Her position was illustrated yesterday in comments to the German media by an influential political supporter. Michael Meister, deputy parliamentary leader of the chancellor's Christian Democrats, said France and Italy had to do more to resolve structural problems within the EU.

But the French president and his ministers believe the answer to Europe's enduring problems of debt and unemployment lies in measures to stimulate growth and getting people back to work.

In his news conference, broadcast live on French television from the Elysee Palace, Mr Hollande went further, praising the EU Commission for "starting to understand the risks and threats" of relying so heavily on belt-tightening.

The southern EU nations, in particular, are showing little sign of easing themselves out of the collective financial predicament.

Mr Hollande said he saw it as his duty to lead Europe out of its lethargy.

"With Mrs Merkel, we do not have the same political sympathies but we do share the responsibility to find a compromise between France and Europe,' he said.

"We have always sought compromise and it has often taken time, but we've always managed. That had to continue because otherwise there is the risk that it will be the end of Europe. "

He also said that whereas the first year of his mandate had concentrated on tackling France's economic problems and correcting injustice, the second would be devoted to bringing down unemployment - and promoting his European initiative.

Mr Hollande this week won a two-year EU extension of France's deadline for bringing its deficit to within 3 per cent of gross domestic product (GDP). It was originally required under the EU's collective response to the debt crisis to meet the target by the end of this year, a target now seen as unattainable.

Hopes of domestic recovery, however, were simultaneously hit by the announcement that GDP had shrunk by 0.2 per cent for the second quarter in succession. And the respite won in Brussels was accompanied by a demand from José Manuel Barroso, the European Commission president, that France should "present a credible reform programme" aimed at improving competitiveness.

Discontent in France is evident in everyday conversation as much as media comment.

While public opinion is notoriously capricious, polls consistently suggest record unpopularity for a president so early into his five-year mandate.

His image took another battering on the eve of his Elysee news conference, only his second since taking office, when a television documentary portrayed him as a weak leader derided by his own officials and henpecked by his partner, Valerie Trierweiler.

With his stock so low on the domestic front, it came as little surprise that he should dwell on international issues in his opening remarks yesterday.

He referred first to France's military intervention to help drive Islamist militants from power in northern Mali, an operation that has not proved the disaster some critics feared. Mr Hollande said this week that popular Malian support for French engagement meant there was no risk of creating another Afghanistan.

The Pew Research Centre, based in Washington DC, warned this week that support for the EU in eight member countries it surveyed, including France, had fallen from 60 to 45 per cent in the past year.

"The European Union is the new sick man of Europe," it said .


* With additional reporting from Reuters

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