Hollande at odds with key partners on structural reform

It would be quite ironic and rather fitting if Germany and France fail to ratify the Merkozy treaty. 25 Nations have ratified the treaty but France and Germany still have not. French president Francois Hollande has already threatened non-ratification unless the treaty is revised. The Leader of the Social Democrat Party (SPD)in Germany, Frank-Walter Steinmeier, is making similar threats for the first time.

German chancellor Angela Merkel says the Merkozy treaty is not renegotiable. There is just one "slight" hitch: France has not signed the treaty and will not sign the treaty unless it is reworked says François Hollande who on May 6 will in all likelihood replace Nicolas Sarkozy as president of France. Moreover, Hollande's demands have gotten steeper and steeper as he inches closer to election.

Financial Times Deutschland says the key to whether or not the Eurozone holds together depends on Bundesbank president Jens Weidmann. Will he or won't he go along with ECB president Mario Draghi's hint that the ECB is about to purchase more sovereign debt.

FINANCIAL markets were electrified last week by comments from European Central Bank President Mario Draghi, who said:

President Francois Hollande promised Thursday to force French companies to pay a 75% levy on salaries over a €1-million after his plan to tax individuals was rejected as confiscatory by the country’s constitutional court. Mr. Hollande made the surprise announcement in a “moment of truth” television interview he hopes will reverse record low approval ratings for a French head of state.

By Cam Hui: As we await the results of the French and Greek elections, there has been a considerable change of focus in the eurozone from the paradigm of all-austerity-all-the-time to growth strategies. The villains, according to those who push back at the "fiscal compact", is Angela Merkel and, to a lesser extent, Mario Draghi.