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Hollande vows to work with Merkel

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The new French president has to put "everything on the table" to boost growth in the eurozone after calling for "balanced" and "respectful" relations with Germany.

Speaking after talks with German Chancellor Angela Merkel in Berlin on Tuesday, Francois Hollande reiterated Merkel's desire that Greece should stay in the eurozone, as the country's political woes raised fears it could leave the single currency bloc.

Both leaders said they wanted to keep debt-stricken Greece in the euro. They will hold an informal summit on May 23.

During his election campaign, Hollande said he wanted to renegotiate the EU's fiscal pact, which will require its signatories to balance their budgets.

Merkel has said the terms of the agreement cannot be changed.

Hollande included the possibility of eurobonds, which would pool the debts of eurozone nations, backed by all 17 member governments.

Germany has always rejected the idea of eurobonds.

"As president of the [French] republic, I want to renegotiate what was accepted at a certain stage to give it the dimension of growth," Hollande said, standing alongside Merkel, at a news conference in the German capital.

Merkel said France and Germany were willing to "study the possibility of additional growth measures in Greece".

Greece is struggling to enact the austerity measures required by the EU and the IMF in return for a bailout of $170bn.

Lightning start

Earlier on Tuesday, Hollande was sworn in for a five-year term, becoming France's first Socialist president in 17 years.

In his inauguration speech, Hollande said he wanted to deliver a "message of confidence" and pledged to govern with "dignity and simplicity".

The new president said he was fully aware of the challenges facing France, which he summarised as "huge debt, weak growth, reduced competitiveness, and a Europe that is struggling to emerge from a crisis".

Shortly after the ceremonies, Hollande departed for Berlin, but his plane was hit by lightning and had to turn back to Paris.

Hollande resumed his journey on a second plane, arriving 90 minutes later than scheduled.

According to official figures released on Tuesday morning, the French economy showed no growth in the first quarter of 2012. Growth in the final quarter of 2011 was also revised down to 0.1 per cent from 0.2 per cent.

However, Germany's economy grew by a stronger than expected 0.5 per cent in the first three months of the year.


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