Germany says ready to fight for eurozone growth

Germany said on Saturday it was prepared to promote growth in the eurozone, a wish dear to Francois Hollande, the front-running candidate in this weekend's French presidential election.

"I am confident our two countries will initiate good solutions for Europe and our common currency," German Foreign Minister Guido Westerwelle told Sunday newspaper the Frankfurter Allgemeine Sonntagszeitung.

After the French election "we will quickly get to work on adding a growth pact to the budget treaty to promote competitivity", Westerwelle said.

Hollande, who has campaigned against austerity calls championed by Germany, has said he intends to renegotiate a budget treaty approved by 25 of the European Union's 27 member states in 2011, to put a greater emphasis on growth.

But Hollande spokesman Pierre Moscovici told Frankfurter Allgemeine Zeitung's Saturday edition that no matter what the French Socialists did not want to provoke a crisis and that the Franco-German friendship remained essential.

"We know that Angela Merkel would prefer to see (incumbent) Nicolas Sarkozy win," said Moscovici, who is a former European affairs minister.

But if Hollande wins "we want to show that nothing will shake the Franco-German friendship", he said.

Earlier however a leader of German Chancellor Merkel's conservative CDU party said Europe's budget pact must remain intact even if Hollande is elected president of France.

"The budget treaty must not be relaxed ... our partners see things this way as well," Christian Democratic Union parliamentary president Volker Kauder told the regional daily Neue Osnabruecker Zeitung.

Hollande's position has led to a marked realignment by many EU leaders who had backed calls for budget discipline as unemployment and growth become hot topics across the continent.

The EU has already been working on plans to encourage growth in countries with high unemployment, like Greece and Spain, with the core question one of how to best promote growth while still reducing excessive debt in Europe.

"When we speak about growth prospects for Greece and Spain, that is not new," Kauder noted.

"The chancellor has always said clearly that she wants to use existing EU funds more widely.

"There will not be new public programmes to boost activity, such as the (opposition) German Social Democrats and Francois Hollande are calling for," he concluded.

Germany, the biggest donor to European Union structural funds, has been criticised by partners within the 17-nation eurozone as Berlin resists calls to increase borrowing, for example via common eurozone bonds.

Kauder argued that using fiscal stimulus to promote growth "could only be financed by new debt. That would be exactly the wrong signal to send to financial markets.

"That would only reinforce the eurozone debt crisis once again," he said.

Swedish Foreign Minister Carl Bildt meanwhile urged Hollande on Saturday to take account of European economic conditions if he wins the presidential poll.

"Are French politicians going to wake up at some point and recognize the economic reality of the modern world? One day or another that is going to happen," Bildt told German daily Die Welt.

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