France - Germany

German government memo calls France 'Europe’s biggest problem child'

Just days after the leak of a French Socialist Party memo critical of German Chancellor Angela Merkel, a German newspaper has revealed an internal German political memo harshly critical of the French government’s economic management.

Reuters/Laurent Dubrule

The German daily Handelsblatt has obtained an internal memo compiled for German Vice Chancellor and economics minister Philipp Rösler, who leads the Free Democratic Party, a centre-right party in Germany’s ruling coalition.

“French industry is increasingly losing its competitiveness. Businesses continue to move overseas, and the profitability of businesses is low,” the memo wrote.

The memo also criticised France’s increasing labour costs and dwindling investment in research and development, noting that France has the “second-shortest working year” in the European Union, and that its tax load is “the highest within the Eurozone”.

Dossier: Eurozone in crisis

But, Handelsblatt wrote, the heaviest criticism was found in an analysis entitled: “France – Europe’s biggest problem child”, which criticised France’s highly-regulated labour market and social welfare system.

The Free Democratic Party is a strong supporter of free-market liberalism.

Germany’s economics ministry told the news agency AFP: “the note was meant exclusively for internal use, and not for publication,” adding that it was compiled by a service “that regularly analyses the competitiveness of countries in the Eurozone.”

Relations between France and Germany were put in the spotlight earlier this week when a French newspaper published a leaked Socialist Party memo that called for a “confrontation” with Germany over Angela Merkel’s “selfish” insistence for austerity measures in Europe.

French and German politicians have since tried to play down any suggestion of a rift in relations between the two biggest economies in the Eurozone.

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