German risks rift with France over economic healthcheck demands

Wolfgang Schaeuble has asked the distinguished "wise men" panel, which advises the government in economic matters, to examine possible reform proposals for France, according to German daily Die Zeit.

Although a spokesman for the council dismissed the claims as outside "the council's legal remit," Lars Feld, an economist who sits on the panel, told Reuters: "Concerns are growing given the lack of action of the French government in labour market reforms."

Two officials also told Reuters that Mr Schaeuble had asked the advisers to consider drafting a report on what France should do.

Die Zeit and Mr Feld said that the discussions remained informal, but if agreed, it would be the first time in 49 years where the panel has compiled a report on any other country but Germany.

Mr Schaeuble's request denotes growing concern in Berlin and among private economists over the health of the French economy, which is set to miss a European Union goal for reducing its public deficit next year.
France has the second biggest eurozone economy, after Germany, but tension between the two countries has increased since French President Francois Hollande's election in May.
On Friday, a Bank of France survey predicted gross domestic product (GDP) would shrink 0.1pc in the last quarter of 2012, pushing France into a technical recession, defined as two consecutive quarters of contraction, as the third quarter is also expected to be negative.

Read more: http://www.telegraph.co.uk/finance/financialcrisis/9667687/German-risks-rift-with-France-over-economic-healthcheck-demands.html