Hollande Set for EU Summit Showdown With Merkel
European leaders will explore ways of breathing life into their stricken economies at a summit on Wednesday, but the issue of euro-zone bonds and whether they can help alleviate two years of debt turmoil will dominate the meeting.
Prime Minister Mariano Rajoy of Spain, where the economy and banking system are at the frontline of the crisis, will meet newly elected French President Francois Hollande in Paris ahead of the evening summit to discuss policy positions - a marked shift away from the traditional Franco-German axis.
At nearly all previous summits over the past two years, Hollande’s predecessor Nicolas Sarkozy met German Chancellor Angela Merkel beforehand to fix a strategy, prompting criticism from other leaders about diktats from Paris and Berlin.
In that respect, Hollande’s victory has significantly changed the terms of the debate, with his call for greater emphasis on growth now a rallying cry for other leaders. That has set up a showdown with Merkel, who supports growth but whose primary objective is budget austerity and structural reform.