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French Socialists call for weaker euro, eased EU budget rules

France's President Francois Hollande (L) and German Chancellor Angela Merkel arrive for a meeting at the Elysee Palace in Paris, May 30, 201
France's President Francois Hollande (L) and German Chancellor Angela Merkel arrive for a meeting at the Elysee Palace in Paris, May 30, 201

By Mark John

PARIS (Reuters) - France's ruling Socialists called on Sunday for a weaker euro and changes to EU rules on budget deficits, accusing the centerright governments of Britain and Germany of creating economic hardship across the European Union.

At a conference on Europe, Francois Hollande's party adopted a policy paper that toned down earlier attacks on German Chancellor Angela Merkel, providing some relief to the French president as he seeks to ease tensions with Berlin.

"Right-wingers have ruined Europe and thrown Europeans into precariousness," read the preamble to the 13-page policy paper which seeks to woo voters ahead of European Parliament elections in early 2014 where Eurosceptic and far-left and far-right parties are expected to make gains.

"The ambition of the (European) community has been destroyed by an alliance of convenience between British conservatives who only want a Europe on the cheap and a la carte, and the free-market intransigence of the German right," it concluded.

That was a watering-down of an earlier draft which accused a "self-centered" Merkel of wounding Europe with an austerity drive. The text also resisted demands from the left wing of the party for an outright suspension of EU budget deficit rules.

Instead, the paper said the EU Stability Pact, limiting national deficits: "should be revised to incorporate a spirit of cooperation rather than punishment and to prioritize support for growth in each country, respecting (national) specificities".

The text also called for a re-opening of EU austerity plans agreed for Greece, Portugal and Spain; the issue of Eurobonds; coordinated steps to allow a devaluation of the euro, notably against the Chinese and Japanese currencies; an easing of EU state aid rules; and increased funding for the EU.

The paper, while expressing the view of Hollande's party, will not necessarily translate into official government policy. But it will keep pressure on Hollande not to push too far ahead with budgetary rigor.

The two-day meeting in Paris heard an attack on EU leaders by former European Commission President Jacques Delors, who accused them of losing sight of the EU's main goals and creating a "Europe of punishment and alienation".

"I do not like it that when a government goes to Brussels it has the impression of going to see a tough teacher who is going to give it a lecture," the 87-year-old Delors, a former mentor of Hollande, said.

"For me there has been so much talk of the euro that we have completely lost sight of Europe's wider goals," he said to a standing ovation.

Opinion polls show Europeans losing faith in the EU, with disillusionment nowhere higher than in founder member France.

Brussels has given France two more years to bring its budget deficit below a ceiling of 3 percent of output after Paris acknowledged it could not meet the goal this year.

In return, it wants overhauls of France's state pension provision and its rigid labor market - both areas where efforts by past governments have triggered protests and strikes.

(Editing by Robin Pomeroy)

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