France's Hollande says public spending won't unlock growth
Economic growth will not come from more public spending, French President Francois Hollande said Tuesday, calling for the launch of euro-bonds and other new instruments to spur a European recovery.
"Growth will not be born of supplemental public spending," Hollande said in a speech to France's Social, Environmental and Economic Council (CESE).
It "can emerge from our common European will to put in place new instruments: euro-bonds, financial instruments, our imaginations can be big," he added.
Hollande, who won election in a May 6 run-off vote against former president Nicolas Sarkozy, has positioned himself as an advocate of growth rather than austerity as the way out of Europe's economic crisis.
But he called Tuesday for both growth and spending restraint.
"We must reduce the national debt, return to balance in our public finances by the end of the five-year term (of the Hollande presidency), equip ourselves with the necessary discipline," he said.
"If there's no growth, there will be no objectives that can be reached in terms of reducing public spending," he added.
"On the other hand, if we don't get a certain number of excesses under control, there will not be a return to growth. The two go together."
Hollande called for more investment, both public and private, which he said could come from mobilising credit that is currently "misdirected".
© 2012 AFP