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New France president's euro crisis challenge

Tuesday, May 15, 2012 - 02:17

May 15 - As Francois Hollande is sworn in as French President, the euro crisis is deepening. Greece is headed for new elections after the political parties failed to form a government and discussions increase about a possible exit from the euro zone. Joanna Partridge reports.

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A new President - promising growth, not austerity. Francois Hollande became France's first Socialist President in 17 years in a short ceremony. He didn't have much time to get used to the role before meeting his German counterpart Angela Merkel. His inauguration came as fears increase that the euro zone is heading once again for crisis, and that Greece could leave the single currency. Hollande is calling for Europe to stick together. SOUNDBITE: French President, Francois Hollande, saying (French): "I am assessing even today the weight of the obligations which our country faces: massive debt, weak growth, high unemployment, damaged competitiveness, and a Europe which is struggling to recover from crisis." For European finance ministers meeting in Brussels - a small bit of good news. The euro zone narrowly avoided falling back into recession in the first quarter of 2012. But the debt crisis sucked the life out of the French and Italian economies. And the figures showed the gap continues to widen between the rest of the bloc and strong exporter Germany - whose output grew by 0.5%. But Greece remains the focus of concern - as the political parties failed to form a new government, meaning they'll hold new elections. Discussions about Athens leaving the euro zone are growing louder, but Henk Potts from Barclays Wealth doesn't think this would help. SOUNDBITE: Henk Potts, Equity strategist, Barclays Wealth, saying (English): "The idea that you can simply reject this austerity package while staying in the euro zone, quite frankly, is ridiculous. They need to make that commitment to European leaders that they appreciate they've got to work as hard as possible to rebalance finances, to bring down the debt, to bring down the deficit if they're to be given the aid and the support of other European countries." And if Greek politicians don't want to do that - analysts say they would have to default and leave the euro. That leaves European leaders worrying about Greece's problems spreading to Spain and Italy. They have a fine line to tread. They don't want to give Greece more aid without austerity, but they don't want the unimaginable consequences of its euro zone exit either. Joanna Partridge, Reuters

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New France president's euro crisis challenge

Tuesday, May 15, 2012 - 02:17