But the vow to keep Greece in the euro system was coupled with a demand that the Greek government, however it is constituted after elections June 17, carry out budget-cutting and other reform obligations undertaken in return for a massive bailout. “We expect that after the elections, the new Greek government will make that choice,” the E.U. leaders said in a communique.
While the leaders were unanimous in a desire to eke more growth out of their anemic economies, efforts to agree on the growth pact were stymied by disagreement over the best way to reach the goal. The clashing views endangered prospects for effective stimulus at a time when the euro-zone economy is falling into recession and growth stands at just slightly over zero in the entire 27-nation European Union.
Prolonging the continent’s slowdown could also undermine the beginnings of recovery in the United States, dampening exchanges across the globe’s increasingly integrated economy.
President Francois Hollande of France, reporting on a six-hour dinner discussion that ended in the early-morning hours, said most leaders supported modest steps such as “project bonds,” or E.U.-backed loans for specific investments, and increasing the lending power of the European Investment Bank. But he said Germany and other countries refused to go along with his suggestion for broader eurobonds, debt that would be backed by E.U. governments in solidarity with near-bankrupt countries whose borrowing has become prohibitively expensive.
“All the member countries do not agree with my views,” he said. “I have to make that confession.”
Hollande said he would continue trying to get effective and swift growth measures despite opposition from German Chancellor Angela Merkel. His proposals, he added, do not mean he disagrees with the German leader that Europe must continue to carry out its pledges of fiscal discipline, which are contained in a treaty reached in December after lengthy diplomacy by Merkel and Hollande’s predecessor, Nicolas Sarkozy.
“There is still a lot of persuasion work to be carried out between now and the end of June,” he added dryly.
The leaders have scheduled another summit for June 28 and 29, by which time Hollande said the outlines of a growth pact should be clearer. But he gave no indication that the dispute with Germany was rounded off by the evening’s long discussions.
The E.U. president, Herman van Rompuy, predicted that proposals for a growth pact will still require work even after the June gathering, implying that agreement on a convincing package of measures was far from assured and that any meaningful stimulus for Europe’s withered economies would be further postponed. “It’s too soon at this stage to say in what framework we will work,” he told a post-summit news conference.