The weekly Journal du Dimanche said that France wants the European Union to agree before the end of 2012 on growth boosting measures worth EUR 120 billion.

The newspaper also reported that France has accepted Germany's rejection of its call to issue mutualized debt in the euro bloc and now agreed that so called euro bonds were a project to be looked at over a 10 year time frame.

The EUR 120 billion are to come from a combination of short term growth instruments such as project bonds, reallocated EU structural funds and fresh investment capital from the European Investment Bank.

French President Mr Francois Hollande submitted his ideas to EU partners and the European Council a few days ago ahead of a Group of 20 Summit in Mexico and four way talks with the leaders of Germany, Italy and Spain in Rome.

Mr Hollande said that the measures should be enlarged upon before the end of 2012 with the creation of a financial transaction tax and measures to create jobs, especially for young people. The EUR 120 billion would be made up of some EUR 55 billion of unused EU structural development funds, some EUR 4.5 billion in project bonds for infrastructure projects and EUR 60 billion in capital that could be raised by the EIB if it were given an extra EUR 10 billion in financing.

Mr Hollande, France's first Socialist leader in 17 years, is demanding that Europe complement a budget discipline pact agreed earlier this year with a growth pact, an idea so widely supported that Berlin has come around to it.

Mr Hollande has put himself on a collision course with the German government, however, with his push for the euro zone to adopt new mechanisms to insulate member states and their banks from market turmoil, such as a joint fund to pay down debt.

Meanwhile, German Chancellor Ms Angela Merkel strongly opposes creating euro bonds in the near term or having Germany underwrite debt or guarantee bank deposits in the euro zone.

Source - Journal du Dimanche

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