On a day when the normally understated president of Europe’s central bank called on the Continent’s leaders to “take a courageous leap of political imagination,” two of the most important figures went home Thursday from an inconclusive summit meeting to tend to domestic matters.
It was not entirely clear what steps the president of the European Central Bank, Mario Draghi, was advocating in his speech in Rome, but President François Hollande of France and Chancellor Angela Merkel seemed more intent on laying the groundwork for changes in Europe’s approach to the euro crisis than on any immediate gestures.
Mr.Hollande has cast himself as the European leader pushing hardest to forge a growth-oriented “new path” through the euro zone’s grinding debt crisis, pitting him against the austerity-minded Ms. Merkel.
Unstated in this drive, but crucial to it, is that Mr.Hollande’s Socialist Party is running hard to secure a victory in parliamentary elections next month, hoping to add the 577-seat National Assembly as the last of the levers of French power it does not already control. A Socialist-led bloc won an absolute majority in the Senate in September, a first since the Fifth Republic was founded in 1958. Opinion polls indicate that a Socialist carte blanche may well be within Mr.Hollande’s reach.
But even armed with such a mandate, analysts say, Mr. Hollande would probably face considerable constraints in pressing for some of the solutions he has championed, including the creation of so-called euro bonds jointly guaranteed by all 17 nations that currently use the single currency.
Shoring up her own bases, Ms.Merkel met Thursday with party leaders from across the German political spectrum, including the opposition Social Democrats and the Greens, seeking their support for proposals that would create a permanent bailout fund for troubled euro zone countries while also tightening oversight of spending.
Emboldened by the shifting political winds on the Continent, her opponents made clear they would do so only if the plans included concrete measures aimed at stimulating growth and creating jobs.
Although no agreements were made during the talks held Thursday at the chancellery, Sigmar Gabriel, the leader of the Social Democrats, said that “what is clear is that Ms. Merkel and her government are moving toward our calls for growth and investment package.”
“The government’s blockade on this has broken down,” Mr. Gabriel said.
Greece and other wobbly euro-zone countries, like Spain, are banking on Mr. Hollande to succeed in his pro-growth agenda and to be the point man with Germany for a loosening of the stringent spending cuts and structural reforms that his predecessor, Nicolas Sarkozy, agreed on with Ms. Merkel.
But even as a growing anti-austerity movement sweeps across the currency union, Mr. Hollande’s room to maneuver could be far narrower than he would like to think.
On Thursday, Moody’s, the credit rating agency, reminded investors that despite the change of government, it was maintaining its negative outlook on France’s AAA credit rating.
That was based on the nation’s high public debt — nearly 90 percent of gross domestic product — and an “overall level of uncertainty regarding the government’s ability to achieve its fiscal consolidation and growth targets.” Mr.Hollande campaigned on a promise of more than $25 billion in new spending programs over the next five years.
He said he would increase the minimum wage, hire 60,000 more teachers and restore a minimum retirement age of 60 for some manual workers (rolling back an increase to age 62 by the Sarkozy government).
Those measures are meant to be offset by $36 billion in tax increases, with an eye to achieving a balanced budget by 2017.
But some of Mr. Hollande’s advisers are already hinting that an audit of France’s finances scheduled for this summer is likely to reveal a much larger hole in the government accounts than had been acknowledged by his predecessor, Mr. Sarkozy.
“There are certainly deficits, things hidden in the shadows,” Mr. Hollande’s prime minister, Jean-Marc Ayrault, said recently of the audit.
“We will discover the reality and strike a balance between fostering growth and making the necessary efforts to reduce the debt.” Meanwhile, many private economists say France’s official forecasts for economic growth — 1.7 percent of G.D.P. next year, rising to 2.5 percent after 2013 — are wildly optimistic.
That could make for a far tighter budget program than Mr. Hollande has been expected to present to an extraordinary session of Parliament in July.
Any backtracking on his election promises could well be seized upon by members of the populist National Front, which is expected to win several seats at the expense of Mr. Sarkozy’s Union for a Popular Movement — the first time the far right will have been represented in Parliament since the late 1980s.
As if the challenges he faces at home were not enough, Mr. Hollande must also find ways to bridge the left-right divide between European leaders that widened over the last year as Ms. Merkel and Mr. Sarkozy — a conservative tandem that became known as “Merkozy” — pushed their austerity drive.
Mr.Hollande used the occasion of a six-hour dinner with his 26 other European Union counterparts in Brussels on Wednesday to raise his profile by broaching the controversial subject of euro bonds, an idea that has been fiercely resisted by Berlin.
Attendees described the discussion as light on detail, and Mr. Hollande himself conceded that while “there was no conflict, no confrontation between the various countries,” some leaders — whom he did not name — “were even more against euro bonds” than Ms. Merkel.