Merkel calls for European unity, Sarkozy vows reform

PARIS / BERLIN

‘I know that the lives of many of you, already tested by two difficult years, have been put to the test once more,’ says French leader Sarkozy in his new year’s message. AP photo

French President Nicolas Sarkozy pledged in a grave New Year’s message to find ways to pull the economy out of stagnation in the four months left before a presidential election and vowed no further public spending cuts. In her speech, German Chancellor Angela Merkel said Europe must cooperate more closely if it wants the euro to succeed as a shared currency.

The French President told the nation that the worst economic crisis since World War Two would continue to hurt households in 2012 and urged people to be stoical, Reuters reported.

Sarkozy said he was intent on agreeing reforms at a Jan. 18 meeting with labor unions that could bolster employment and economic competitiveness. He also said he wanted taxes on imported goods to help fund France’s cherished welfare state.

“I know that the lives of many of you, already tested by two difficult years, have been put to the test once more. You are ending the year more worried about yourselves and your children,” Reuters quoted Sarkozy as saying. “The only way to preserve our sovereignty, to control our destiny, is to choose ... the route of structural reforms rather than that of impulsive actions which only add to confusion and chaos without restoring confidence.”

The French President is heading towards April’s election trailing Socialist challenger Francois Hollande in opinion polls and with rampant unemployment, the eurozone crisis and the prospect of a sovereign debt downgrade hanging heavy over him.

Many French resent the fact that his campaign pledges of five years ago to bolster employment have come to little. Some feel Sarkozy’s past tax reforms have over-favored the wealthy and many also dislike what they see as an impulsive and brash manner that stands out from the more austere and erudite personalities of past presidents.

Sarkozy is expected to confirm in late February that he will run for a second term. He risks a clash in his talks with unions, who are angry they lost a 2010 fight over his reform to raise the minimum pensionable age to 62.

He hopes to agree ways to have unions and management cooperate on bringing more flexibility to the job market, but union leaders may oppose any cuts in wages.

French unhappy with Sarkozy
Sarkozy’s popularity ratings have inched up as he has shown leadership over the eurozone crisis, but still stand at 34 percent in recent polls, and some two-thirds of French are unhappy with his performance.

Recent surveys show Hollande could beat him by as much as 10 percentage points in a deciding second-round in May.

Meanwhile, German Chancellor Angela Merkel said in her New Year’s Eve address that Europe must cooperate more closely, warning that it still has a long way to go to overcome the debt crisis.
Merkel said she would do everything in her power to strengthen the euro, but that this would only work if Europe learned from its mistakes.

“A common currency can only really be successful if we in Europe cooperate more than we have done,” Merkel said in a televised address. “Europe is growing together in the crisis.”

Merkel also said that while the German economy was doing well, next year would “without a doubt be more difficult than this one.”

Italy’s President Giorgio Napolitano on Saturday called on Italians to make sacrifices to prevent a “financial collapse.”

“Sacrifices are necessary to ensure the future of young people, it’s our objective and a commitment we cannot avoid,” Agence France-Presse quoted Napolitano as saying in his New Year’s speech.

“No-one, no social group, can today avoid the commitment to contribute to the clean up of public finances in order to prevent the financial collapse of Italy,” he said. “The sacrifices will not be in vain.”