Hollande pressured over EU debt

Pressure built on president-elect Francois Hollande to stand by France’s austerity commitments Tuesday as he attended a World War II commemoration ceremony with ousted rival Nicolas Sarkozy. Hollande laid a wreath with Sarkozy at the Tomb of the Unknown Soldier beneath the Arc de Triomphe in Paris, as France marked the anniversary of the end of World War II in Europe. The two then stood side-by-side as a military band played the national anthem Marseillaise and the Chant des Partisans, the song of the French Resistance. “There are issues that unite us all, beyond the person of Nicolas Sarkozy or of me,” Hollande told journalists after the ceremony. The 57-year-old Socialist won power on Sunday, ousting incumbent right-winger Sarkozy. He is due to take office formally on May 15 before embarking on a packed calendar of major international summits. Hollande has said tackling Europe’s debt crisis will be at the top of his agenda, putting him on a collision course with fellow EU leaders — in particular Germany’s Angela Merkel — over his plan to renegotiate the bloc’s fiscal pact. Japan joined those raising concerns about his plans Tuesday, with Finance Minister Jun Azumi warning Hollande to keep the nation’s fiscal discipline in place. “We want (France) to do what has been decided so far,” Azumi told a regular news conference, according to Dow Jones Newswires. “I don’t know whether Mr Hollande will immediately act on what he has said in heated debates during the election campaign. “But realistically, I think it is impossible (for European nations) to give up on fiscal-rebuilding efforts,” he said. Hollande promised cheering supporters Sunday that he would reopen talks to ensure the EU fiscal pact focused on growth rather than simply imposing deficit-cutting austerity rules, an idea opposed by Berlin. Merkel warned once again that reopening talks on the pact — endorsed by 25 of 27 EU governments in March — would be impossible, but said she would welcome Hollande to Berlin next week “with open arms”. Hollande’s transition chief Pierre Moscovici said Tuesday there was room for a compromise. “We will find a compromise. And I am convinced that things are starting well,” Moscovici told RTL radio. Hollande will not give up on his hope for “a European project that is more favourable to growth” and does not want to ratify the pact “in its current state” without additional moves on growth, he said. The uncertainty generated by Hollande’s election and the political turmoil in Greece, where election gains by hard-left and extreme-right parties stripped the ruling coalition of its majority, have riled the markets. But Hollande’s victory has not yet sparked the financial chaos that Sarkozy warned of during the campaign. France raised 7.98 billion euros ($9.1 billion) in short-term debt Monday, with lower interest rates paid to investors for two of the three maturities offered. French shares showed a fall of 2.02 percent in mid-day trading on Tuesday, while Asian markets were mixed and the euro moved in a tight range. Hollande plans to replace some of Sarkozy’s cost-cutting with higher taxes on the wealthy while balancing the French budget by 2017, despite a hiring spree in education and a return to retirement at 60 for some workers. From a meeting with Merkel shortly after his inauguration, Hollande will travel to the United States for the G8 summit on May 18 and 19 and a NATO gathering on May 20 and 21. Hollande’s communications director Manuel Valls confirmed Monday that France would use the summit to announce a French troop withdrawal from Afghanistan between now and the end of the year. Hollande’s party must also set off on the campaign trail again in short order for France’s June parliamentary elections, when he will hope to secure a ruling majority.