Exclusive: Worried Germany seeks study on French economy - sources

Fri Nov 9, 2012 11:22am EST
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By Annika Breidthardt and Rene Wagner

BERLIN (Reuters) - German Finance Minister Wolfgang Schaeuble has asked a panel of advisers to look into reform proposals for France, concerned that weakness in the euro zone's second largest economy could come back to haunt Germany and the broader currency bloc.

Two officials, speaking on condition of anonymity, told Reuters this week that Schaeuble asked the council of economic advisers to the German government, known as the "wise men", to consider drafting a report on what France should do.

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.

"Concerns are growing given the lack of action of the French government in labor market reforms," Lars Feld, an economist who sits on the panel, told Reuters.

Although Schaeuble raised the prospect of a report on France with members of the council this week, Feld and the finance ministry made clear that the government had not submitted a formal request. The ministry declined comment on the minister's "unofficial discussions" in general.

French President Francois Hollande's office declined to comment.

The panel of advisers publishes an annual report on the state of the German economy, which it handed over to Chancellor Angela Merkel on Wednesday. It can also draft special reports when it sees economic imbalances developing or at the formal request of the government.

Since being founded 49 years ago, the panel has published no studies on individual countries but Germany, according to its website. Its last expert opinion, the first since 1997, was published in July, following the European Union summit in June.   Continued...

German Finance Minister Wolfgang Schaeuble delivers his speech during the "German Economic Forum", organized by German weekly newspaper "Die Zeit", in the St.Michaelis church in Hamburg, November 8, 2012. REUTERS/Fabian Bimmer