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Sarkozy Lays Foundation For Reshaping The Eurozone

Dec 1, 2011
Originally published on December 1, 2011 10:14 pm

In a highly anticipated speech Thursday night, French President Nicolas Sarkozy laid the groundwork for tighter French-German cooperation.

He made an ambitious call for a rewrite of European treaties, but his speech — billed as his last-ditch plan to save the euro — offered no concrete emergency measures to contain Europe's debt crisis.

French news channels broadcast Sarkozy's speech live and showed him walking into a packed auditorium in the southern city of Toulon. The setting was symbolic, because it was in the same auditorium three years ago, just after Lehman Brothers fell, that Sarkozy gave a major speech denouncing what he called capitalism gone wild.

Thursday night, he admitted that things had not gotten better.

"I know the French feel that their lives are completely upended by a crisis they had nothing to do with. To give the French control back over their lives, we have to let them control their destiny. And to do that, France must prepare itself for this new economy," Sarkozy said

He said the only way France could confront the crisis was by working more and cutting spending. The country had not balanced its budget since 1974, he noted, calling the situation untenable.

For the next 30 minutes Sarkozy spoke about a new world with open borders, where the French could no longer enjoy a welfare system fashioned in the profitable years after World War II.

In a clear jab at the opposition socialists, Sarkozy denounced the 35-hour workweek and retirement at age 60 as two policies that had destroyed French competitiveness. Finally, 30 minutes into the speech, Sarkozy got around to talking about the euro.

Failure To Step In With Tough Measures

The speech had two distinct halves, says Jim Hertling, bureau chief for Bloomberg News in Paris.

"The first half was a campaign speech, and the second half was a Europe speech," he says.

Sarkozy faces a tough re-election next year.

Herling says that time and again, European leaders have failed to stop the crisis, using patchwork measures that seem to come too little too late. And Thursday night's speech was just more of the same, he says.

Most analysts agree that at this point, only a massive intervention by the European Central Bank to buy the debt of suffering countries or the issuing of common, euro bonds backed by all members will be able to boost confidence in the common currency and calm markets.

But so far, Germany has resisted such measures, calling first for a strict European financial governance to be put in place.

Sarkozy admitted that it had been difficult to stop the crisis, and that leaders had stumbled. He blamed it on European treaties that lacked emergency measures and the ability to deal with such a crisis. He admitted they were making it up as they went along.

Finally, 45 minutes into the speech, he gave the first real news.

"After this long road, we are coming back to essentials. That's why France and Germany want a new European treaty, in order to rethink the organization of Europe," he said.

Sarkozy said European treaties should mandate a balanced budget for every member of the eurozone and punish violators. He announced that German Chancellor Angela Merkel would be going to Paris Monday, where the two leaders would announce new measures to guarantee the future of Europe. Bloomberg's Hertling says he's not convinced it will be enough.

"There's going to be a Franco-Germany proposal for things they want to see happen, new rules to police European budget rules. You're going to have the whole question that's going to bog down in process," he says.

Call For German-French Unity

To French critics — who have accused the French president of being Merkel's lapdog or of wanting to build a German Europe — Sarkozy stressed that Europe could only function if France and Germany were tightly bound.

"France and Germany, after so many tragedies, have united their destinies for the future. To go back on this strategy would be unpardonable. History and geography have made us adversaries or partners. We have chosen friendship, and that has brought peace. Only if France and Germany are united will Europe be strong," he said.

And this partnership, he asserted, would actually enhance French sovereignty. Merkel will speak to the German Bundestag on Friday. Analysts expect her to build on Sarkozy's themes of solidarity and stricter budgets.

Copyright 2013 NPR. To see more, visit http://www.npr.org/.

Transcript

GUY RAZ, HOST:

From NPR News, this is ALL THINGS CONSIDERED. I'm Guy Raz.

MELISSA BLOCK, HOST:

And I'm Melissa Block.

French President Nicolas Sarkozy gave a highly anticipated speech tonight. It was billed as a last-ditch plan to save the euro. Sarkozy laid the groundwork for tighter French-German cooperation.

But NPR's Eleanor Beardsley reports that aside from calling for a rewrite of treaties, Sarkozy offered no concrete emergency measures to contain Europe's debt crisis.

ELEANOR BEARDSLEY, BYLINE: French news channels broadcast Sarkozy's speech live and showed him walking into a packed auditorium in the southern city of Toulon . The setting was symbolic because it was in the same auditorium three years ago, just after Lehman Brothers fell, that Sarkozy denounced what he called capitalism gone wild. Tonight, he admitted that things had not gotten better.

PRESIDENT NICOLAS SARKOZY: (Through Translator) I know the French feel that their lives are completely upended by a crisis that they had nothing to do with. To give the French control back over their lives, we have to let them control their destiny. And to do that, France must prepare itself for this new economy.

BEARDSLEY: Sarkozy said the only way France could confront the crisis was by working more and cutting spending. The country had not balanced its budget since 1974, he noted, calling the situation untenable.

For the next 30 minutes, Sarkozy spoke about a new world with open borders, where the French could no longer enjoy a social welfare system fashioned in the profitable years after the Second World War.

In a clear jab at the opposition socialists, Sarkozy denounced the 35-hour workweek and retirement at 60 as two policies that had destroyed French competitiveness. Then Sarkozy finally got around to talking about the euro.

JIM HERTLING: It was sort of two halves, right? The first half was a campaign speech and the second half was the Europe speech.

BEARDSLEY: That's Jim Hertling, bureau chief for Bloomberg News in Paris. Hertling says time and again, European leaders have failed to stop the crisis, using patchwork measures that seem to come too little, too late. And tonight's speech was just more of the same, he says.

Most analysts agree that at this point, only a massive intervention by the European Central Bank to buy suffering countries' debt or the issuing of common euro bonds - backed by all members - will be able to boost confidence in the common currency and calm markets. But Germany has so far resisted such measures, calling first for a strict European financial governance to be put in place.

Sarkozy admitted that it had been difficult to stop the crisis and that leaders had stumbled. He blamed it on European treaties that lacked emergency measures and the ability to deal with such a crisis. He admitted they were making it up as they went along. Forty-five minutes into the speech, he gave the first real news.

SARKOZY: (Through Translator) But, after this long road, we are coming back to essentials. That's why France and Germany want a new European treaty in order to re-organize and rethink the organization of Europe.

BEARDSLEY: Sarkozy said European treaties should mandate a balanced budget for every member of the eurozone and punish violators. He announced that Chancellor Merkel would be coming to Paris Monday, where the two leaders would announce new measures to guarantee the future of Europe.

Bloomberg's Hertling says he's not convinced it will be enough.

HERTLING: This is - you know, there's going to be a Franco-German proposal for things that they want to see happen, new rules to police European budget rules. So, you're going to have that. You're going to have the whole question that's going to bog down in process.

BEARDSLEY: To French critics who have accused Sarkozy of being Merkel's lap dog or of wanting to build a German Europe, Sarkozy stressed that Europe can only function if France and Germany are tightly bound.

SARKOZY: (Through Translator) France and Germany, after so many tragedies, have united their destinies for the future. To go back on this strategy would be unpardonable. History and geography have made us adversaries or partners. We have chosen friendship and that has brought peace. Only if France and Germany are united will Europe be strong.

BEARDSLEY: And this partnership, he asserted, would actually enhance French sovereignty. Tomorrow, Chancellor Merkel will speak to the German Bundestag. Analysts expect her to build on Sarkozy's themes of solidarity and stricter budgets without getting into specifics.

For NPR News, I'm Eleanor Beardsley in Paris. Transcript provided by NPR, Copyright NPR.