Saturday

21st Oct 2017

Germany would 'never dare' to judge France on economy

  • Differences but no frictions, the two ministers say (Photo: Council of European Union)

The finance ministers of France and Germany on Tuesday (13 November) strongly denied there were any friction about how Paris is tackling the country's economic problems.

"It is extraordinary that we get questions on frictions and divergences during a joint press conference. The very aim of this press conference is to show there are none," French finance minister Pierre Moscovici said.

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"There are no Franco-German misunderstandings, no meddling in each other's affairs," he said. But he admitted that it was "natural" for the "bigger" friend Germany to show an interest in how France is reducing its public deficit and how Paris plans to catch up on competitiveness.

Moscovici presented a "competitiveness" plan on Monday evening during a meeting of eurozone finance ministers. It outlined what Paris plans to do to reform its labour market and bring the public deficit and debt within EU thresholds.

The International Monetary Fund and a specially-commissioned report both urged Paris to focus more on labour market reforms rather than tax hikes for the rich and for companies.

The French government has meanwhile readjusted its policy and announced a €20 billion tax relief for enterprises.

For his part, German finance chief Wolfgang Schaeuble - a renowned fiscal hawk - said his country would "never dare to judge France's economic decisions" and that he "fully trusts" the government to take all the right measures to bring the economy onto a more competitive track.

The joint press conference comes after a series of denials in Germany of press reports that Schaeuble wanted to ask an advisory panel of economists - usually dealing with the domestic economy- to have a look at France's economy.

Instead, Schaeuble on Tuesday floated the idea of jointly tasking "experts within a broader exercise" to look at the historic and cultural roots of the economic traditions of both countries.

"We are not giving grades to each other. That would be the worst basis of the Franco-German relationship," Schaeuble said.

No matter the type of government in both countries, the Franco-German entente was crucial for Europe to overcome the crisis, both ministers said.

"We are the two largest economies in Europe and we have a special responsibility which we are willing to assume. France and Germany will always be working towards bridging their differences," Moscovici said.

France stripped of another top rating

Moody's on Monday became the second ratings agency to strip France of its top rating, citing continued economic woes and lack of competitiveness.

Macron puts trade policy on summit table

France's president wants a "political discussion" on EU trade policies at Thursday's summit, amid domestic concerns over Canada and South America deals. But his colleagues are likely to avoid a lengthy debate.

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