France's Hollande: The Euro Zone Crisis Is Over
Despite record unemployment in the continent, anemic growth at best and a manufacturing sector in contraction, French President Francois Hollande said this weekend that the euro zone crisis is over.
"What you need to understand here in Japan is that the crisis in Europe is over," he told an audience of business leaders organized by the Nikkei media group in Japan on Saturday.
Speaking on the last day of a three-day state visit to Japan, Hollande added: "We have used various measures to address weaker nations. Member nations have tried to restore fiscal health. We have also established a banking federation. Due to these efforts, yields in the euro zone have dropped dramatically and we have been able to restore confidence among investors."
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His comments come despite euro zone unemployment topping 12.2 percent in April with youth unemployment over 50 percent in Spain and Greece. Hollande said that France and Germany were trying to address unemployment to return to growth.
"However, we must create a new outlook - an outlook for growth and employment. Together with Germany, we are trying to establish new goals beyond fiscal discipline. France and Germany together are trying to address unemployment, particularly among the youth, in order to restore Europe's competitiveness…We must ensure that industries are not only hindered but become part of our long-term strategy."
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But critics say Hollande's confidence belies a much weaker economic picture.
"Hearing Mr Hollande saying that the euro zone crisis is over — if he really thinks that then he needs to think again because, though financial markets have been stabilized, the crisis is far from over," Costas Lapavitsas, professor of Economics at the School of Oriental and African Studies (SOAS) in London told CNBC on Monday.
"Europe needs to redirect its economy and as long as it remains in recession, the debt problem will be unmanageable in the periphery and elsewhere. So Europe has a combined problem here, how to lower the volume of debt in the periphery and how to restart the engines of growth — there has been very little progress in either direction this year," he told CNBC Europe's "Squawk Box."
Hollande's comments come as his German counterpart, Chancellor Angela Merkel sounded a more cautious note, urging EU countries on Saturday to carry out further structural reforms.
"It's very much in Germany's interest to do everything it can to ensure other states implement structural reforms, that budgets are made solid and that economic activity is stimulated in this way," she said in a video podcast.
- By CNBC's Holly Ellyatt, follow her on Twitter @HollyEllyatt