Hollande Talks Austerity With Merkel On First Day

Robert Siegel talks to Sylvie Kauffman, editorial director of the French daily Le Monde and Josef Joffe, editor of the German weekly, Die Zeit and senior fellow at Stanford University. They discuss Tuesday's meeting between Francois Hollande and Angela Merkel.

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ROBERT SIEGEL, HOST:

The relationship between the French president and the German chancellor is always an important one for Europe. So how might Angela Merkel and Francois Hollande deal with their policy differences? Well, we're going to hear now from two prominent European journalists. Josef Joffe is the editor of the German weekly, Die Zeit, and Sylvie Kauffmann is the editorial director of the French daily Le Monde. Welcome to both of you.

JOSEF JOFFE: Hello from Hamburg.

SYLVIE KAUFFMANN: Hello.

SIEGEL: And Sylvie Kauffmann, let's start with you; your view of the new French president. Is Francois Hollande, you think, likely to be demanding, conciliatory? What do you think?

KAUFFMANN: Well, I think he will be more conciliatory. Of course, he may be demanding also. But it will be a big difference for Angela Merkel between Nicolas Sarkozy and Francois Hollande. You know, even though she offered to campaign for Nicolas Sarkozy and, of course, politically, ideologically was more inclined to continue with him as a European partner, in fact, she will most likely find Francois Hollande much easier to deal with.

SIEGEL: Josef Joffe, what do you think about that? Angela Merkel's party has been losing in state elections in Germany. She's lost some friends in the EU, in the Netherlands where the government fell. Is she likely to show some give in these talks with Francois Hollande?

JOFFE: I don't think so because her biggest obstacle to giving is her own electorate, which does not look kindly on spending more and guaranteeing more and facing more inflation, which has, by the way, come back. But I thought, you know, when I watched the two on the red carpet, I thought it was kind of a funny omen with Angela kind of nudging and leading the president who didn't quite know which way to turn. But that's just a kind of journalistic tidbit.

I think she would give him something on the symbolisms, but not on the substance.

SIEGEL: Josef Joffe, at the outset, Sylvie Kauffmann talked about the personal relationship that Angela Merkel might be able to enjoy with Francois Hollande. Do you think that matters much to her and what might he encounter in the way of her personality?

JOFFE: I'm not so sure that the tempers and the personalities of leaders matter as much as we journalists would like to make it. But if you permit me, let me just go back and compare France to the United States. The United States is also in economic trouble, not as bad as France, of course. It's running a 10 percent deficit that is growing. But the United States, luckily, can get money on the international markets.

France will have trouble getting money in the international markets. So my question is, where is the stimulus going to come from? So then you turn to the European Central Bank, but the European Central Bank is not like the Fed. The Fed can create money without limits. The ECB cannot. It's not designed to be a money-creating machine.

So I don't quite understand how the mechanism works. Do the Germans kind of hand over money to France and Spain and Italy, and not just to Greece?

SIEGEL: Sylvie Kauffmann, first, I know Francois Hollande sees himself as not just the president of France here, but someone carrying the banner for growth throughout the EU, generally. If so, is the answer to that question, is it just for Germany to hand over more money? Ultimately, is the answer, yes, we want you to give more money to other countries?

KAUFFMANN: No. I think he - it's got to be - I agree with Josef Joffe, that it cannot be. Nobody is going to Berlin begging, you know, just give us the money to fill the hole. That's not - obviously, that's not a posture which is possible for a politician today. And I certainly don't think that's what Francois Hollande means.

What I think they are going to do is to build together or strengthen those European mechanisms which may help those countries which are in difficulty now without, you know, having the Germans to pay for the debts of everybody.

SIEGEL: Just finally and very briefly from each of you, is it an absolute for both Francois Holland and Angela Merkel, Josef Joffe, that the euro - that the idea of the common European currency must continue? And that the euro, however flawed it may be, is an important and necessary thing for Europe?

JOFFE: Look, if you ask me, as an economist - as a cold-hearted economist - I would say we should never have gotten into the euro. But now we have it. If we start fiddling with it, it's like fiddling with a nuclear weapon. We just don't know when it will go off and what kind of devastation it will bring.

I mean, we should have kicked out Greece two years ago, but we keep paying. But, as to the rest, I think we will try to defend the euro with all our might until we run out of money. I don't think anybody among the large countries - certainly not Mr. Hollande and Frau Merkel - want to sacrifice the euro.

SIEGEL: Sylvie Kauffman, agreed?

KAUFFMANN: I agree. I agree. We have to sort out this Greek problem which is really terrible and urgent. But I can't see any responsible politician in Europe at the moment not preventing the euro to break up. I mean this would be the end of the European idea. So I can't see this happening.

JOFFE: And Obama would lose the election.

SIEGEL: Well, Josef Joffe...

(SOUNDBITE OF LAUGHTER)

SIEGEL: Josef Joffe of Die Zeit in Hamburg, and Sylvie Kauffman of Le Monde in Paris, thanks to both of you for talking with us.

KAUFFMANN: Thank you.

JOFFE: Au revoir.

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