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Emmanuel Macron to stress EU financial solidarity in Athens

  • Thu, 07 Sep 2017 10:41

Emmanuel Macron: expended a lot of energy proposing reforms to the eurozone that would create a central treasury with its own budget © EPA

Emmanuel Macron will make the case for an overhaul of the eurozone during a two-day state visit to Greece designed to mark the member of the single-currency union’s relative return to normality.

The French president and his wife are flying to Athens with about 40 French executives on Thursday to emphasise the need for more financial solidarity with weaker members of the eurozone, in the form of investment and a common budget to help prevent new existential crises in the bloc, Elysée aides said.

The leader is pushing for the EU to adopt tighter labour rules, more protective trade tools and more stimulus, in exchange for more budget discipline at home and deregulation in the French jobs market — a bargain that Germany is showing signs it might consider.

Mr Macron has said he would like each country’s contribution to the future eurozone budget to amount to “several” gross domestic product percentage points.

“We need to help Greece in this more positive phase that’s starting and that, one can hope, is also a symbol of a new phase for the eurozone,” an Elysée adviser said. “It’s in Athens that the symbol of the crisis and the collective excesses that Europe experienced during the crisis were the most striking and it’s where this new chapter must begin.”

Mr Macron’s arrival in Greece comes after Athens’ €3bn bond offering, which was more than twice subscribed. Alexis Tsipras, the Greek prime minister, hailed the sale on July 28 as “the most significant step towards ending this unpleasant adventure of the memorandum [bailout]”.

The leader of the ruling leftwing Syriza party, who is battling criticism at home over increases in tax and social security contributions imposed by its bailout creditors, is counting on Mr Macron’s visit to boost his popularity and highlight the changing mood among EU partners.

The economic outlook in Greece is brightening. Growth of 1.8 per cent is expected this year, after seven years of recession that saw a 25 per cent decline in national output.

However, unemployment, which has declined marginally this year, remains the highest in the eurozone at 21.7 per cent. The government has failed to meet privatisation targets set in its bailout programme and struggled to attract substantive private investment from abroad. The opposition centre-right New Democracy party, whose leader, Kyriakos Mitsotakis, will also meet Mr Macron, holds a double-digit lead over Syriza in opinion polls.

“The [Greek] government sees this as the moment when Mr Macron should reaffirm support for Greece in Europe and for French investors to step in to balance the German and Chinese presence,” said Costas Iordanidis, a writer and political commentator.

By pushing French companies to bet on the Greek recovery, Mr Macron is seeking to placate Mr Tsipras, who criticised the French leader’s proposal in June to tighten control over foreign investments in the EU. The Greek premier had underlined, with the Portuguese leader, the paradox of such a policy after having to sell state assets to Chinese investors in exchange for bailout money.

Athens this year had to sell a 51 per cent stake in Piraeus port to China’s state-controlled CoscoShipping.

The Piraeus transaction “poses a problem of sovereignty for Europe”, an Elysée aide said. “It’s a form of European failure that it happened like that. Were there, at the time, other solutions? Perhaps not. But if similar cases, concerning assets of that importance, present themselves in the coming years, it would be preferable that we find European solutions.”

Executives from French oil group Total, utility Engie, cosmetic company L’Oréal, drug company Sanofi and construction group and airport operator Vinci will be part of the delegation, the Elysée said. While no large deals are expected to be signed during Mr Macron’s visit, the French port operator Terminal Link is part of a German-led consortium negotiating the acquisition of Thessaloniki port, seen as a gateway to the Balkans, with the Greek privatisation agency.

“We’d like to see more French investment in infrastructure and energy but also in other sectors like agribusiness,” said George Katrougalos, deputy foreign minister for economic affairs.

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