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Hollande’s reforms find favor in Germany

AFP-JIJI

Germany on Wednesday welcomed the beleaguered French president’s “courageous” plan to spur the economy as a rapprochement toward its own approach, but analysts were skeptical about real change.

Foreign Minister Frank-Walter Steinmeier, a Social Democrat in conservative Chancellor Angela Merkel’s right-left “grand coalition,” said Francois Hollande’s proposals marked a bold step.

By focusing on the competitiveness of businesses and budgetary rigor, Hollande is on the right path not only for France, but also for Europe to emerge from its debilitating economic crisis in stronger shape, he said.

Praise also came from the finance ministry, whose spokeswoman expressed “great respect,” while the deputy parliamentary group leader for Merkel’s conservatives, Andreas Schockenhoff, said the reforms marked a “paradigm change.”

He noted that Hollande had spoken out in his election campaign against the austerity policies championed by Germany in fighting Europe’s financial crisis.

Hollande laid out plans that were at odds with election promises to boost spending and crack down on the rich as the French economy struggles after growing more slowly than its EU partners, especially Germany.

Insisting that a return to economic growth was essential to France “retaining its influence,” Hollande announced plans for €50 billion ($68 billion) in spending cuts between 2015 and 2017 and a €30 billion reduction in corporate payroll charges.

He also urged cooperation with Germany to be stepped up, including on defense matters.

Claire Demesmay, of the German Council on International Relations, said Hollande’s speech contained a significant message for Germany’s new “grand coalition” government. “Hollande says he’s social democratic. It’s important for the Franco-German relationship,” she said.

But she remarked that tax cooperation for businesses had already been launched by Merkel and Hollande’s conservative predecessor, Nicolas Sarkozy.