France, Germany want to keep debt-stricken Greece in eurozone

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As Greece headed for a fresh election after the last attempt to form a government failed in Athens, new French President Francois Hollande and German Chancellor Angela Merkel have voiced their support for the debt-stricken nation to remain in the eurozone.

The two leaders said last night after their first meeting in Berlin that they both wanted to keep Greece in the 17-nation group.

They also offered their support to promote growth in their EU partner and help it to emerge from the present crisis.

At the same time, they reminded the Greek politicians that their country has to fulfil its commitments to the EU.

"We want Greece to remain in the euro zone and we know that this is the wish of the majority of the Greek people," Merkel told a joint news conference with Hollande after their one-hour meeting in the chancellory.

The meeting was an occasion for the two leaders to get to know each other and to smoothen their relations after Merkel's open support for former French President Nicolas Sarkozy in the election campaign. Her refusal to receive Hollande during the campaign had also caused some irritations.

Hollande said he hoped the Greek people will reaffirm their adherence to the euro zone in the upcoming election. He also mooted the idea of a European growth policy for Greece.

The meeting in Berlin was overshadowed by the news from Athens that a last-ditch effort by President Karolos Papoulias to form a government of technocrats failed because of continuing differences between pro and anti-bailout parties.

A caretaker government will rule the country until the election, which is expected to take place in four weeks. Hollande renewed his criticism of the EU's fiscal pact on budget discipline and said he will press for its renegotiation.

During the election campaign, he insisted that he will not accept the fiscal pact in the present form and a component to promote growth and employment must be included.

"As President of the French republic I want to renegotiate what was accepted at a certain stage to give it the dimension of growth," he said.

Growth should not be an empty word and it must be felt in every day life. Everything which can contribute to growth must be discussed at the next summit of the EU leaders on May 23, he said. These included a proposal for a common euro bond for all nations having the single currency, which is strongly opposed by Merkel.

The Chancellor, who championed the fiscal pact together with Hollande's predecessor Sarkozy always insisted that the agreement signed by 25 of the 27 EU member nations in March and ratified by some members is not open for negotiations and she will stick to her austerity course, which in her view is the right strategy to resolve the euro zone debt crisis.

Referring to the economic situation in France, Hollande said first of all growth must be generated at the national and European level.

This is a prerequisite for scaling down debt and budget deficit. The French economy stagnated in the first quarter this year after achieving a 0.2 per cent growth in the final quarter of 2011, according to official statistics. The two leaders underlined the importance of the Franco-German relations and their key role in the EU.

The two nations are determined to work together for the benefit of their people and for Europe in general, they said.

The French President said his first foreign trip after taking office took him to Berlin because of the importance his country attaches to its relations with Germany.

His appointment of his socialist colleague Jean-Marc Ayrault, a former German teacher and expert on German affairs as the new Prime Minister, is interpreted by some analysts as an indication of his desire to further build up the Franco-German relations.

Hollande, who dashed to Berlin just hours after his swearing in as the first Socialist President in 17 years, arrived in Berlin nearly one-and-a-half hours late as his aircraft was struck by a lightning shortly after taking off from Paris and he was forced to return to board another plane, media reports said quoting French government officials.

The President and his entourage were unhurt. He was received with military honours by Merkel as he arrived at the chancellery.