x Abu Dhabi, UAESaturday 20 January 2018

Poll joy is shortlived for French and Greek leaders

Hollande and Samaras prepare to battle with Germany at G20 economic summit.

French President Francois Hollande, centre, a day after winning the majority he needed to underpin his socialist programme.
French President Francois Hollande, centre, a day after winning the majority he needed to underpin his socialist programme.

MARSEILLE, FRANCE // The jubilation of electoral triumph was shortlived for French and Greek political leaders as they returned yesterday to the daunting task of shaping their countries' immediate futures and helping to the save the euro.

The French president, Francois Hollande, having won the absolute parliamentary majority he needed to underpin his socialist programme, flew to the Group of 20 (G20) economic summit in the Mexican Pacific resort of Los Cabos aware that European woes and tensions would dominate the proceedings.

The France 2 public television channel used an image with the slogan "Hollande versus Merkel" during election night coverage, a blunt allusion to the rift between the president and the German chancellor, Angela Merkel. Lively exchanges are expected on the margins of G20, though Mrs Merkel, unlike Mr Hollande, will fly home afterwards rather than going on to the G+20 environmental gathering in Rio de Janeiro.

In Athens, Antonis Samaras, leader of the centre-right New Democracy party that narrowly won the Greek election on Sunday but without an outright majority, is attempting to form a coalition government of national consensus.

Mr Samaras wants to keep his crisis-struck country in the euro zone but also seeks renegotiation of the tough budgetary conditions attached to the latest European bailout.

Agreement with the socialist Pasok party should be within reach but he is expected to court wider support in the hope of forming a government with broad-based popular backing. Germany is warning that the substance of the bailout deal is cast in stone, even though Europe has indicated some flexibility may be possible on the implementation of reforms, interest rates on loans and incentives to growth. Mrs Merkel telephoned Mr Samaras with congratulations but said her assumption was that "Greece will meet its European commitments".

As Mr Hollande and Mrs Merkel seek a measure of agreement in the nine days that remain before the European Union summit in Brussels that could determine the single currency's future, the economic plight of two other member states, Italy and Spain, respectively the zone's third and fourth economies, is a continuing source of concern. The Spanish borrowing rate touched 7.061 per cent yesterday, the highest since the euro was introduced in 1999.

The world beyond Europe is affected by the euro crisis, and the gnawing effect of European debt, and other G20 leaders gathering in Mexico were expected to leave the normally united Franco-German axis in need for lasting solutions.

Mr Hollande campaigned for the French presidency, and his party for legislative power, on demands for concrete measures to stimulate growth as a viable alternative to ever-deeper austerity.

Mrs Merkel reportedly resents his attempts to forge close ties with Italy, seen by some observers as a ploy to recruit another big euro zone economy as his ally in dealings with the chancellor, and the friendly welcome he extended to Elysée visitors from the German left-of-centre opposition. Her position remains that while growth is a feature of Germany's own proposals, too, it will solve nothing without fiscal discipline.

Mr Hollande's vision does strike a chord with the US president, Barack Obama, and the Mexico talks will consider how to get stagnant or ailing economies moving and create jobs, especially for the young.

But what reassurances the European leaders can give on a timetable for greater financial union to bolster the single currency, ahead of the Brussels summit starting on June 28, is far from clear.

The British prime minister, David Cameron, whose country is outside the euro zone but vulnerable to knock-on effects should it collapse, arrived at G20 with a thinly veiled warning to Mr Hollande that it was "muddle-headed" to suppose countries could spend their way out of trouble.

Advance extracts from his speech, cited by the BBC and due to be delivered last night, showed him listing the five major economic threats to the world as the euro zone instability, sovereign debt, poor growth, protectionism and failures to regulate banks.

"The reality is that there are a set of things that euro zone countries need to do," the speech added. "And it's up to euro zone countries whether they are prepared to make the sacrifices these entail ... if the euro zone is to stay together, then it has to make at least some of these difficult decisions."

The Syrian conflict, with Russia's stubborn resistance to sanctions and the near-collapse the UN peace plan, will also be a focus of attention in Mexico.

The climax to France's hectic 2012 election season left Mr Hollande in comfortable control of the national assembly, where his socialist party and its close allies can govern without having to worry about pleasing the Left Front, which includes communists. He won the presidency from Nicolas Sarkozy on May 6 and his party has held a majority in the senate, or upper house, since last year.

After a vote from which 44 per cent of the electorate abstained, the socialists had 291 seats, two more than needed for an absolute majority, with 17 more occupied by close allies, against the centre-right Union for a Popular Movement's 212. Marine Le Pen, leader of the far-right Front National, failed by 118 votes to be her party's fourth candidate to win a seat and is seeking a recount.

* Additional reporting by Reuters and Agence France-Presse