Hollande: Canceling the memorandum means rupture with Europe

In an exclusive interview with on Mega television stationk, French president Francois Hollande, sent a meaningful message to many recipients.

 

Meanwhile, a WSJ report says that the third largest French bank, Credit Agricole, could even leave the Commercial Bank if Greece were to leave the euro. The article says that Credit Agricole plans to transfer sound assets out of the Commercial Bank if developments in Greece drive the country outside the Eurozone.

 

Here is Hollande’s interview on Mega:

 

OLGA TREMI: Good afternoon Mr President.

 

FRANCOISE HOLLANDE: Good afternoon.

 

OT: I want to thank you for this interview. It is an honor to have you here on Mega.

I will start with the Greek program, which is based on some ideas for recession that are far from reality. Over the past 5 years the overall recession rate in Greece is 20%. What are the changes which the Greeks should hope for after the renegotiation of the memorandum? Should we expect an extension of the fiscal adjustment period? Hope that salaries and pensions will not be reduced any further and that Europe will focus on growth?

 

FH: Since I was elected president of France I set growth as a priority in terms of the European commitment. In the late June summit we will take steps towards growth that will have an impact on Greece, if Greece itself chooses to remain in the Eurozone and honor its commitments. Compliance with the already agreed commitments does not mean remaining in the same situation. I argued before my counterparts that the European structural funds that have not been absorbed will be used for growth in Greece.

 

OT: Could you be more specific? Many Greeks believe there is no danger of the country exiting the Eurozone because this would cost a lot to the Eurozone itself. Is it true that this danger does exist and that some are preparing for it? 

 

FH: I respect the Greek people. You will decide what you want in the elections on June 17. I am p\President of a Republic that has parliamentary elections on the same day. Therefore, I believe that voters should exercise their full sovereignty. But I must warn you because it is my duty and I am a friend of Greece: if there is the impression that the Greeks want to move away from the agreed commitments and abandon any prospect of recovery, then there will be countries within the Eurozone that will prefer to terminate the presence of Greece in the Eurozone. I prefer to say this because this is the language of truth. I do not support this position. I want Greece to remain in the Eurozone but the Greeks should be aware that this requires a relationship of trust.

 

OT: After the May elections all Greek political parties are talking about renegotiation of the memorandum. Some, however, want it to be canceled. Will the financial assistance be discontinued in this case?

 

FH: I do not want to put any pressure. The French president will not tell the Greeks what to do. It is possible, and as president I will ensure that funding will come to Greece to develop and improve the situation in the country. The complete cancellation of the memorandum will be considered as a rupture by many countries of the eurozone.

 

OT: Is it true what some people say that Europeans were quick to settle the Spanish problem in order to prepare Europe for a Greek "accident"?

 

FH: No, not true. It was urgent to settle the problem for Spanish banks. There was a serious threat to Spain that it coul no longer be refinanced. You see that this is not a situation only about Greece but other countries too, even though their condition is different. Europe deals with situations as they appear and acts fast as happened in the past with Greece and in a different context with Spain.

 

OT: Do you know what is being said in Greece? That there are many politicians in Europe who express their ideas about the present and the future of Europe, but in the end Europe does what Merkel wants. They say it while taking into account the that Nicola Sarkozy had always agreed with Merkel. How will this change?

 

FH: Firstly there is change. The French wanted me to be the President of the Republic. There was also a second change. I somehow made sure that growth will be the issue for which the Europeans will sit at the table and make new commitments. The third change is that the economic situation has evolved so that we must have safeguards to ensure that banks can be funded. Therefore, we are already at another stage. Greeks should understand this as well. That there will not be only two people in Europe that will be deciding on behalf of others.

 

OT: This is very important, especially for the weakest countries. But Europe has not agreed on this issue, the issue of growth. That is, not all Europeans think that fiscal discipline and growth should be two sides of the same coin.

 

FH: It's true. There are governments in Europe that do not think the same on development, discipline, supervision of banks, taxing financial transactions, eurobonds. There are differences but it is important to reach a settlement in the end.

 

OT: Will you reach it?

 

FH: It requires serious work on fiscal matters. In my country we will make choices that will allow us to regain balance in the budget, because we also have a large debt. But there will be options for growth too. Moreover, I say this very simple thing: If there is no growth, and Greece is the proof, there can be no reduction in the fiscal deficit. Therefore, we must be serious and  disciplined, but at the same time we need increased economic activity for more tax revenue that will enhance the public funds in each country.

 

OT: One last question. Many, not only in Greece, believe that Germany wants to create a two-speed Europe. Let's look at the current picture. Three countries have a memorandum already. Another country, Spain, has a "light" Memorandum, as it is called. And there might be more countries tomorrow. Does this mean that we are facing the creation of a Europe of those who lend and those that borrow? What is your vision for Europe? Was this the vision of General de Gaulle, who spoke of a Europe stretching from the Atlantic to the Ural Mountains?

 

FH: There is a Europe of 27 members. And it does not necessarily have the same speeds to handle a number of problems or a certain level of risks. I understand this completely. The proof is that we have the Eurozone and there are countries that do not belong to it. France and Greece are in the eurozone, so we must be in solidarity and make efforts in terms of our responsibilities. But there is also a first union, the union of the euro. And I want to keep the Eurozone. The countries that constitute it must remain within it, provided that they want it and will decide for it, which is what the Greeks will do on June 17.

 

OT: Is this your message to the Greek people or do you wish to add anything else?

 

FH: I am a Frenchman, a friend of the Greeks. I ask them to trust me. I am not a candidate, but the President of France. I am in no position to impose on the Greeks what to do. I cannot say something that will influence them. Because this is not the way I understand my relationship with Greece, which is a great and proud country, and expecting to be governed only by the Greeks. Therefore, what I ask of them is to have confidence in what we can do together and to be honest. That is, to choose what seems best. And if they want to stay in the eurozone they must know that Europe will support them because it is necessary and at the same time there will be fair efforts as well. This was my program for France. The able and the wealthy must pay their fair share.

 

OT: Mr. President, thank you very much.

 

FH: Thank you, too.