French President Francois Hollande says recession is now “threatening the very identity of Europe”. Speaking at a news conference in Paris, he said the financial crisis was now under control and “behind us” but “what is hitting Europe is a recession…provoked by the austerity policy”.
Mr Hollande was speaking after figures showed France to be back in recession.
He said he would push for the creation of a eurozone economic government with a real president, to meet every month.
That government would aim to harmonise European taxes and mutualise sovereign debt, he said.
Germany has long insisted that the EU is not ready institutionally to mutualise debt – a move that experts say would require EU treaty change.
Germany and other richer eurozone countries are reluctant to provide more taxpayer-funded bailouts for weaker eurozone members, after the debacles in Greece, Cyprus and some other “periphery” countries.
“If Europe does not advance it will fall or even be wiped out from the world map,” Mr Hollande said.
“My duty is to bring Europe out of its lethargy.”
Critics say Mr Hollande has been slow to tackle France’s jobs crisis, and opinion polls suggest a big slump in his popularity a year after he took office.
Mr Hollande said it was a “good signal” that the European Commission had “started to understand the risks and threats” of fiscal austerity.
He also urged the EU to bring forward planned spending to combat youth unemployment, which has reached record levels in Greece and Spain.