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French President Inserts New Voice In EU Summit

Jun 30, 2012
Originally published on June 30, 2012 7:32 am

Transcript

SCOTT SIMON, HOST:

This is WEEKEND EDITION from NPR News. I'm Scott Simon. Markets saw their day best in weeks yesterday after European leaders agreed to a series of measures to deal with their debt crisis. This took an all-nighter at an EU summit in Brussels after Italy and Spain refused to leave the table without a package of concrete measures. Now, France has been Germany's traditional partner in many economic measures, but France's new president, Francois Hollande, who is a socialist, gave his support to the rebellion against Germany's prescribed austerity approach.

It was Monsieur Hollande's first EU summit as president. NPR's Eleanor Beardsley joins us from Paris. Eleanor, thanks for being with us.

ELEANOR BEARDSLEY, BYLINE: Thank you, Scott.

SIMON: What did they agree on?

BEARDSLEY: Well, they agreed on three major things. They agreed on a $150 billion growth package to finance growth projects across the eurozone. But what is even seen as more important is that they agreed to new rules for using the $600 billion European bailout fund. Henceforth, this bailout fund will be able to bail out banks without having that amount be put on government's books.

So that means Spain, that has just received this huge bank bailout, the Spanish government will not have to sign off on this. So that is going to relieve market pressure. And the third thing they agreed upon, countries who are seen as virtuous - that means they are following deficit reduction - those countries will be able to tap into this bailout fund without having to undergo any further austerity measures.

SIMON: Former President Sarkozy had such a close working relationship with Angela Merkel - jokes about the cheese tray notwithstanding - that they were sometimes dubbed Merkozy. How has this change in approach been received in France?

BEARDSLEY: You know, Sarkozy tried to keep close with Merkel to maybe contain German dominance. Hollande has taken a completely different approach. He broke with the traditional French/German alliance. He has joined forces with the eurozone's third and fourth largest economies, Italy and Spain. They have encircled German Chancellor Angela Merkel to pressure her. Monti, the Italian Prime Minister Mario Monti, is being hailed as the hero of this summit.

But Hollande went to meet with him several weeks ago. He's empowered Monti because Monti and Merkel had a face-off. Monti is a fiscal conservative. He's an economist. He's a former European commissioner. He has impeccable credentials. He has the ear of President Obama and Merkel couldn't tell him no. So behind the scenes, Hollande was pushing to change the dynamics, to change it from France and German controlling everything to have this sort of alliance of countries to put pressure on Merkel to do some other things than simply enforcing austerity.

SIMON: President Hollande expressed any reaction to the summit?

BEARDSLEY: Well, he, of course, is playing it down saying there's no winners and loser. Europe won. But one of the front pages of the newspaper today showed Merkel dressed in a German football - soccer shirt and Hollande dressed in a French one and it said, Hollande 1, Merkel 0. So he's definitely getting credit for it here in France.

SIMON: Yeah. Of course, he's been in office only since May, campaigning largely on that anti-austerity pledge. This helps him domestically?

BEARDSLEY: Oh, absolutely, because, you know, it seems that he's done more in a month to shift the dynamics of this crisis and to help countries who really need the help than Sarkozy did in the last year. So people are quite impressed with what Hollande has been able to achieve by taking a different tactic in dealing with Germany.

SIMON: NPR's Eleanor Beardsley in Paris, thanks so much.

BEARDSLEY: Thank you so much. Transcript provided by NPR, Copyright NPR.