Bildt: next French leader faces 'wake up' call

Swedish Foreign Minister Carl Bildt urged the front-running French presidential candidate Francois Hollande on Saturday to take account of European economic conditions if he wins a presidential poll.

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Speaking to the German daily Die Welt, Bildt voiced concern over the potential consequences of mooted attempts to renegotiate an EU budget treaty, even as he cast doubt over whether Hollande would in fact pursue that path.

"Are French politicians going to wake up at some point and recognize the economic reality of the modern world? One day or another that is going to happen," Bildt said.

"The question is: will it be such a brutal awakening that it affects all of us?" the Swedish minister added.

Sweden is an EU member but has not adopted Europe's single currency.

Hollande, who is tipped to win Sunday's French election, has said he will renegotiate a budget treaty approved by 25 of the European Union's 27 member
states in 2011, to put greater emphasis on growth.

Bildt wondered however "what will really be put into effect" if Hollande defeats President Nicolas Sarkozy, and urged whoever won to focus on fundamental economic weaknesses facing many EU countries.

"We must confront a series of structural problems," the Swedish minister said.

A leader of German Chancellor Angela Merkel's conservative CDU party said meanwhile that the EU budget treaty must remain intact if Hollande is elected
president.

"The budget treaty must not be relaxed ... our partners see things this way as well," Christian Democratic Union parliament speaker Volker Kauder told the regional daily Neue Osnabruecker Zeitung.

Hollande's position has nonetheless led to a marked realignment by some EU leaders who had backed calls for budget discipline as unemployment and growth become hot topics across the continent.

The EU has already been working on plans to encourage growth in countries with high unemployment, like Greece and Spain, with the core question one of how to best promote growth while still reducing excessive debt in Europe.

Some like Hollande want to stump up fresh funds for infrastructure investments, while others have pushed for reform of rigid labour markets and opening up of tightly controlled service sectors.

Kauder noted that in Germany "the chancellor has always said clearly that she wants to use existing EU funds more widely.

"There will not be new public programmes to boost activity, such as the German social democrats and Francois Hollande are calling for," he concluded.

Germany, the biggest donor to European Union structural funds, has been criticised by partners within the 17-nation eurozone for resisting calls to increase borrowing, for example via common eurozone bonds.

Kauder argued that using fiscal stimulus to promote growth "could only be financed by new debt. That would be exactly the wrong signal to send to financial markets" and exacerbate the eurozone debt crisis.

Hollande's campaign director Pierre Moscovici spoke meanwhile to the conservative German daily Frankfurter Allgemeine Zeitung, saying that the Socialist front-runner was not looking to pick a fight.

"We do not want to provoke a crisis. In the event of a possible transfer of power, Franco-German friendship will remain an essential structural element of our policies," Moscovici said.

On Friday, a German government spokesman told a press conference that Berlin "was never afraid of Francois Hollande," though Merkel publicly backed Sarkozy at the start of the campaign.