German, French leftists back EU treaty, press ECB

BERLIN, May 3 (Reuters) Germany and France's main leftist parties are backing a new social-oriented EU treaty and urge the European Central Bank to promote growth and jobs in a new joint paper on Europe seen by Reuters.

In the 11-page document from Kurt Beck, chairman of Germany's Social Democrats (SPD), and Francois Hollande, leader of France's Socialists, the parties want a new treaty in place by European Parliament elections in 2009.

Two years ago, France's Socialists were divided over the draft EU constitution which was ultimately rejected by French voters in a referendum.

Their candidate for the French presidency, Hollande's partner Segolene Royal, has supported a reworked treaty and vowed to pursue another referendum in France if EU states can agree a new text. Her conservative rival Nicolas Sarkozy has promised to push a pared-down treaty through parliament instead.

''It is important to recognise, as a new version of the treaty is debated, that alongside the areas that can be viewed critically, substantial advances are also contained in the current text,'' the joint statement reads. ''There should be no stepping back from these achievements.'' But the paper also supports a reinforcement of the social aspects of the charter, reflecting Royal's call for a stronger acknowledgement of the merits of the European welfare state.

''The emphatic strengthening of the social dimension of the European integration project is a particular political priority for us as Socialists and Social Democrats,'' the paper reads.

French fears about globalisation and EU enlargement, notably the candidacy of largely Muslim Turkey, are blamed for the rejection of the treaty in May 2005. Dutch voters also vetoed the document, which German Chancellor Angela Merkel is trying to relaunch during her six-month presidency of the EU.

The SPD-Socialist document also urges a stronger role for the Eurogroup of euro-zone finance ministers in steering economic and financial policy in the currency bloc.

It presses the ECB to use the ''leeway'' inherent in its mandate to support growth and employment in a ''forceful manner''.

In using that language the parties appeared to have struck a middle ground between Royal's demand that the ECB's mandate be changed to shift its focus to growth and the traditional German view that the central bank should remain independent and focused on combating inflation.

REUTERS SG VV1807