Saturday, May 19, 2012

France's new Socialist govt cuts members' salaries

French President Francois Hollande's new Socialist-led government adopted a 30 percent pay cut Thursday, a gesture of shared sacrifice by leaders who must now reduce the country's massive debts and tackle spiraling unemployment.

The new Cabinet's first meeting, just a week after conservative former leader Nicolas Sarkozy last convened his government, marked a sharp shift in France's power structure and strategy for solving Europe's debt crisis and managing the economy.
The new finance minister reduced hopes in some other European capitals that Hollande would drop his demand for a renegotiation of a hard-won European treaty on trimming budgets.
"The treaty will not be ratified as is. It must be added to, completed with a growth amendment," Pierre Moscovici said after taking control of the Finance Ministry.
Hollande, elected May 6, has said the treaty focuses too much on spending cuts that are stifling growth and making the debt crisis worse, and argued for stimulus spending as well.
He and the leaders of Germany, Britain, Italy and the European Union held a conference call Thursday to discuss Europe's economic strategy ahead of the Group of Eight summit in the United States. Hollande leaves Thursday night for Washington for a meeting with President Barack Obama, and then attends the G-8 and NATO summits.
The sizeable wage reduction was endorsed at a first meeting of the 34-minister team, a day after Germany's government awarded rises to its ministers and Chancellor Angela Merkel, whose pay will overtake Hollande's.
France's New Leader Faces First Test Overseas
France's new president, Francois Hollande, is heading to the United States (Friday) just days after taking office. The G8 and NATO summits will offer a glimpse of France's foreign policy under its new leader.

Francois Hollande took office this week, promising to unify France and help fix its economic problems. His gender-balanced leftist Cabinet sat down to work on Thursday, but President Hollande's first actions are taking place overseas - not at home.

Hours after his swearing-in ceremony, Hollande was in Berlin, holding his first talks with German Chancellor Angela Merkel, France's most important European partner. Despite their talk of unity, there are big differences.

Hollande champions growth along with austerity measures to tackle Europe's debt crisis. Merkel is a budget stickler.