Recession-hit EU faces conflicting choices

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BRUSSELS, Nov. 16 (UPI) -- Europe's return to recession has thrown its advocates of austerity into the arena to face strong new backers of growth-oriented policies, including French President Francois Hollande.

Hollande is increasingly rated as an influential opponent of the austerity regime pursued by German Chancellor Angela Merkel and her allegedly diminishing constituency of EU member countries' politicians who see spending cuts as the only way out of the eurozone crisis.

Pitted against the pro-cuts politicians are not only powerful policymakers like Hollande but also industry leaders and media commentators who want the EU to pour money into growth and stop pulling back on state funding for economic revival.

Latest data showing the EU has slipped back into recession reinforced pro-spending politicians' argument the austerity regime isn't working and, instead, it is inhibiting whatever growth is possible in Europe's challenging circumstances.

Thousands of EU citizens took part in industrial action and protest marches this week and more protests are planned for the weekend. The protesters oppose cuts and want more government spending to stimulate economic activity.

France has poured state funding into recovery programs but Hollande has also come under fire for tough new taxation regimes designed to extract more revenue from the taxpayers, both individual and corporate.

It is Europe's second major recessionary hit since the global economic crisis began in 2008-09 but the first in which both French and German economies are seen to be slowing down amid modest growth. Both countries suffered downgrades by rating agencies this year and are at risk of further negative reassessments of their economic performance.

Other European economies are also at various stages of slowdown, EU economic data indicated.

Hollande has countered France's slow growth with spending plans that require him to introduce hugely unpopular tax regimes, opposed by the country's super rich but enjoying support of the unemployed.

Support for reverting to national currencies has grown in both France and Germany, as well as other eurozone countries, but Merkel wants European lawmakers to continue shoring up the euro. "It is more than just a currency," Merkel said of the euro, "it is a symbol of European unity, freedom and progress."

Arrayed against anti-euro activists are lawmakers and politicians who want EU leaders to do more to transform the union into a European superstate.

"We need a real European state with all the building blocks that the United States put in place two hundred years ago," Liberal group leader Guy Verhofstadt said. "We need a true European government, a true European democracy, and a real European budget."