Francois Hollande to fly to Berlin to meet Angela Merkel within hours of inauguration
FRANCOIS Hollande, France's president-elect, will fly to Berlin within hours of his swearing-in ceremony on May 15 for talks with German Chancellor Angela Merkel.
Tuesday's planned talks, confirmed to the AFP news agency by sources, will include a press conference and a working dinner and were expected to focus on the eurozone debt crisis.
Mr Hollande is to formally become president of France on Tuesday, replacing Merkel's defeated French ally Nicolas Sarkozy, and had previously promised that his first visit would be to Berlin.
France and Germany - Europe's biggest economies - have traditionally been seen as close allies and the motor of European unification.
But ties have come under strain during the debt crisis, with Sarkozy at first pushing for Germany to allow greater burden-sharing within the eurozone, before backing down and tacitly accepting Merkel's leadership.
Mr Hollande campaigned on a pledge to renegotiate the eurozone's fiscal pact, which binds member states to austerity measures, and which Mrs Merkel argues is essential to underpin the continent's eventual recovery.
Both the German and French leaders have made conciliatory noises since Hollande's election on Sunday, but the meeting is expected to be tense, with Berlin already insisting the pact can not be re-opened.
Earlier on Thursday Chancellor Merkel warned there is no "magic bullet" to resolve the debt crisis and that deficit-fuelled growth would only catapult the eurozone back into trouble.
In a speech to the German parliament, Mrs Merkel said: "Growth on credit would throw us back to the start of the crisis and therefore we will not do that."
Reducing debts and bolstering growth were the "two pillars" of the crisis-fighting strategy, she reiterated, as a debate rages in Europe over whether to focus more on the economy or slashing deficits.
French president-elect Francois Hollande has said he wants to add measures to foster growth to a German-inspired fiscal pact designed to promote more budgetary discipline in the embattled European Union.
EU leaders will gather on May 23 in Brussels to thrash out a way forward and Mrs Merkel and Mr Hollande will hold talks in Berlin next week in a bid to overcome their differences on the European economy.
"The European sovereign debt crisis will not be beaten overnight ... there is no magic bullet," Mrs Merkel insisted.
"So much has been talked about Eurobonds or leveraging. All these measures have come and gone like magic weapons and then it is recognised that they are not sustainable solutions.
"Only one thing is and remains sustainable: accepting that overcoming the crisis will be a long and difficult process that will only be achieved if we attack the origins of the crisis, which are the horrendous debts and a lack of competitiveness in some European countries," she said.
Mrs Merkel's comments came after a Bundesbank economist suggested one potential way out of the crisis was to boost domestic demand in Europe's top economy and tolerate the slightly higher German inflation this could produce.
"Germany would in this scenario have in the future an above-average inflation rate compared to the eurozone," the central bank wrote.
"But monetary policy would have to ensure that the average eurozone inflation rate corresponded to the target and that inflation expectations remained solidly anchored."
Finance Minister Wolfgang Schaeuble said in comments published this week that Germans deserved higher pay following years of wage restraint and labour market reforms.
"By raising pay, Germany would help reduce economic imbalances in Europe," the minister added.
The European Central Bank, which brings together the central bank governors from all the 17 nations that share the euro, aims to keep inflation close to, but below, two per cent.
Germany's inflation in April stood at 2.2pc, using the ECB's preferred yardstick – the Harmonised Index of Consumer Prices.
In the eurozone, inflation was 2.6pc in April.