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EUROPE

Hollande wants reform of ‘incomprehensible’ EU

French President François Hollande called on Monday for the European Union to scale back its role in the lives of its citizens after anti-EU parties made sweeping electoral gains across the bloc.

Hollande wants reform of 'incomprehensible' EU
Hollande demands reform of EU. What will Merkel make of that? Photo: AFP

In comments with far-reaching implications for the EU's future, the Socialist leader said the spectacular success of parties like France's own National Front (FN) reflected how the bloc had become "remote and incomprehensible" for many of its citizens.

"This cannot continue. Europe has to be simple, clear, to be effective where it is needed and to withdraw from where it is not necessary," Hollande said in a televised address to the nation.

The comments will be greeted with delight by Eurosceptics who accuse Brussels of meddling in national affairs, and by the likes of British Prime Minister David Cameron, who also advocates a scaling back of the powers currently vested in the European institutions.

But their tone will cause concern among those, particularly in Germany, who believe European integration still has further to run.

Hollande's Socialist Party suffered a humiliating setback in Sunday's elections for a new European Parliament, registering a record low vote of just under 14 percent while the FN topped the polls with nearly 25 percent.

The French leader said France remained committed to playing a leading role in Europe, but also acknowledged that the economic austerity of recent years had alienated many ordinary people.

"I am a European, my duty is to reform France and to change the direction of Europe," Hollande added.

"Europe, in the last two years, has overcome the euro crisis but at what price? An austerity that has ended up disheartening the people."

No chance in 2017 

The FN's surge has left Hollande in dire straits.

He is already the most unpopular French leader of modern times and a poll released on Monday revealed that only 11 percent of voters think he would be a good candidate for re-election in 2017.

Le Nouvel Observateur, an influential left-leaning weekly, concluded that: "Hollande no longer has any chance for 2017," and urged the French left to turn its attention to finding an alternative candidate with a better chance of combating the FN.

Sunday's vote marked the first time that the anti-immigration, anti-EU FN had topped a nationwide French poll.

Final results gave the party led by Marine Le Pen just under 25 percent of the vote on a turnout of just over 43 percent, and 24 of France's 74 seats in the 751-member European Parliament.

Detailed analysis of the voting patterns made for worrying reading for the Socialists.

More than 40 percent of workers and 30 percent of the under-35s who voted backed the FN. And the party's success was broadly spread across the country.

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EUROPEAN UNION

The Euro celebrates its 20th anniversary

The euro on Saturday marked 20 years since people began to use the single European currency, overcoming initial doubts, price concerns and a debt crisis to spread across the region.

The Euro celebrates its 20th anniversary
The Euro is projected onto the walls of the European Central Bank in Brussels. Photo: Daniel Rolund/AFP

European Commission chief Ursula von der Leyen called the euro “a true symbol for the strength of Europe” while European Central Bank President Christine Lagarde described it as “a beacon of stability and solidity around the world”.

Euro banknotes and coins came into circulation in 12 countries on January 1, 2002, greeted by a mix of enthusiasm and scepticism from citizens who had to trade in their Deutsche marks, French francs, pesetas and liras.

The euro is now used by 340 million people in 19 nations, from Ireland to Germany to Slovakia. Bulgaria, Croatia and Romania are next in line to join the eurozone — though people are divided over the benefits of abandoning their national currencies.

European Council President Charles Michel argued it was necessary to leverage the euro to back up the EU’s goals of fighting climate change and leading on digital innovation. He added that it was “vital” work on a banking union and a capital markets
union be completed.

The idea of creating the euro first emerged in the 1970s as a way to deepen European integration, make trade simpler between member nations and give the continent a currency to compete with the mighty US dollar.

Officials credit the euro with helping Europe avoid economic catastrophe during the coronavirus pandemic.

“Clearly, Europe and the euro have become inseparable,” Lagarde wrote in a blog post. “For young Europeans… it must be almost impossible to imagine Europe without it.”

In the euro’s initial days, consumers were concerned it caused prices to rise as countries converted to the new currency. Though some products — such as coffee at cafes — slightly increased as businesses rounded up their conversions, official statistics have shown that the euro has brought more stable inflation.

Dearer goods have not increased in price, and even dropped in some cases. Nevertheless, the belief that the euro has made everything more expensive persists.

New look

The red, blue and orange banknotes were designed to look the same everywhere, with illustrations of generic Gothic, Romanesque and Renaissance architecture to ensure no country was represented over the others.

In December, the ECB said the bills were ready for a makeover, announcing a design and consultation process with help from the public. A decision is expected in 2024.

“After 20 years, it’s time to review the look of our banknotes to make them more relatable to Europeans of all ages and backgrounds,” Lagarde said.

Euro banknotes are “here to stay”, she said, although the ECB is also considering creating a digital euro in step with other central banks around the globe.

While the dollar still reigns supreme across the globe, the euro is now the world’s second most-used currency, accounting for 20 percent of global foreign exchange reserves compared to 60 percent for the US greenback.

Von der Leyen, in a video statement, said: “We are the biggest player in the world trade and nearly half of this trade takes place in euros.”

‘Valuable lessons’

The eurozone faced an existential threat a decade ago when it was rocked by a debt crisis that began in Greece and spread to other countries. Greece, Ireland, Portugal, Spain and Cyprus were saved through bailouts in return for austerity measures, and the euro stepped back from the brink.

Members of the Eurogroup of finance ministers said in a joint article they learned “valuable lessons” from that experience that enabled their euro-using nations to swiftly respond to fall-out from the coronavirus pandemic.

As the Covid crisis savaged economies, EU countries rolled out huge stimulus programmes while the ECB deployed a huge bond-buying scheme to keep borrowing costs low.

Yanis Varoufakis, now leader of the DiEM 25 party who resigned as Greek finance minister during the debt crisis, remains a sharp critic of the euro. Varoufakis told the Democracy in Europe Movement 25 website that the euro may seem to make sense in calm periods because borrowing costs are lower and there are no exchange rates.

But retaining a nation’s currency is like “automobile assurance,” he said, as people do not know its value until there is a road accident. In fact, he charged, the euro increases the risk of having an accident.

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