France’s Hollande Says Austerity Alone Can’t Save Europe

Francois Hollande, a contender for the French Socialist Party’s 2012 presidential nomination, said austerity alone can’t save Europe, adding that the euro zone needs economic growth to survive.

Speaking on the second day of the party’s gathering in the port city of La Rochelle in western France, Hollande said Germany, the euro region’s largest economy, can’t prosper if other members don’t.

“We tell our German friends that their prosperity can’t be built on the ruin of other countries,” he told party supporters. “The euro zone won’t survive if there is no growth. If the economic model is solely based on austerity, it won’t work.”

The “anguish and the stress” caused by austerity and an austerity-only policy may push voters to extremes political parties, he said.

French President Nicolas Sarkozy this week bid to defend France’s top credit rating by raising taxes on companies and the wealthiest as he aimed to limit the fallout of budget cuts and a slowing economy in an election year.

Prime Minister Francois Fillon announced 12 billion euros ($17 billion) of measures in 2011 and 2012 and cut growth forecasts, saying the euro region’s second-largest economy will expand less than 2 percent in each year.

To contact the reporter on this story: Helene Fouquet in Paris at hfouquet1@bloomberg.net

To contact the editor responsible for this story: Vidya Root at vroot@bloomberg.net