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Tuesday, April 30, 2013

Germany accuses France of being 'Europe's biggest problem child'

A scathing German assessment of France's economic weakness – in which the country is labelled "Europe's biggest problem child" – has reopened divisions between Europe's two biggest powers.
A leaked internal briefing from Angela Merkel's coalition partners refers to President Francois Hollande as "meandering" and draws attention to France's "highly regulated labour market and highly developed social security system".

Details of the briefing note were published alongside an internal assessment from the German economics ministry, which listed the French economy's failings.

The ministry's paper said: "French industry is increasingly losing its competitiveness. The relocation of companies abroad continues. Profitability is meagre."

Relations between France and Germany are chilly after Mr Hollande's Socialist party accused Mrs Merkel of "egotistical intransigence" and called for "democratic confrontation" with Berlin.

The French Socialists' attack on the German chancellor, which was toned down after a draft was leaked to the press, brought accusations from the French centre-right that Mr Hollande's party had been gripped by Germanophobia.
The public response from the German government was muted, with Mrs Merkel's spokesman describing the French denigration of the Chancellor as "background music".

However, the memos – which were leaked to the financial newspaper Handelsblatt – reveal Berlin's harshly critical private view of France's economic woes.

The German economics ministry's briefing draws attention to France's high wage costs.

It points out that France has the "second lowest annual working time" in the European Union, while its "tax and social security burden" is the highest in the eurozone. It also warns that France has made too little investment in research and development.

The briefing by Mrs Merkel's partners, the Free Democrats, which has been circulated within the German government, is likely to cause fresh tension between the European partners by describing Mr Hollande's reform programme as "meandering". The French president's approval ratings have fallen to record lows since he was elected last May.

The divide between the two nations traditionally regarded as the driving force behind European integration was underlined yesterday with new figures showing that French unemployment, at 11 per cent, was double that in Germany. The German jobless rate of 5.4 per cent is the second lowest in Europe.

While France clings to its totemic 35-hour working week, workers in Germany are increasingly discontented at having to endure years of low pay rises.

The Organisation for Economic Cooperation and Development has said it expects the French economy to grow by 0.1 per cent this year, and has criticised "excessive regulation and high levels of taxation". The German economy, meanwhile, is forecast to grow by 0.5 per cent.

German politicians have closed ranks in defence of Mrs Merkel.

Andreas Schockenhoff, foreign affairs spokesman for the Christian Democrat parliamentary party, said: "The attacks by senior French socialists on the Chancellor are unusual for the German-French relationship, and they are inappropriate.

"The Left-wing government cannot divert attention from the fact that France requires deep structural reforms."

While Mr Hollande has kept a low profile since the working paper, several cabinet members have criticised their own Socialist Party for the remarks.

Prime Minister Jean-Marc Ayrault, a former German teacher, tweeted in German calling for calm and said the two countries would not advance "through confrontation and insults but by putting everything on the table – points of convergence but also of divergence".

After a meeting with Mr Hollande on Monday night, Martin Schulz, President of the European Parliament and a member of the Social Democrats, the main German opposition party, said: "Blaming Angela Merkel for all the problems of Europe, I find that unfair. Around the table in Brussels there are 26 other leaders, not just Angela Merkel.

"It is well known that I'm a Social Democrat, so I'm no supporter of Merkel, but she can't be held responsible for everything that goes wrong in Europe."

The French criticisms of Mrs Merkel were made in a working paper prepared ahead of the Socialist Party's convention on Europe in June, which was leaked in the French press last week. The paper's authors claimed that the German chancellor "thinks about nothing except the savings of account holders on the other side of the Rhine, Berlin's trade balance and her electoral future".

2 comments:

  1. Eh, and here I thought Greece was Europe's problem child. Gee, who woulda thought?

    ReplyDelete
  2. "and you are ugly and your mother dresses you funny, Nyaa nyaa na na nyaaa nyaaa!"

    ReplyDelete