13 October 2014

Reuters: Berlin and Paris set up group to avert policy clash

The German and French economy ministers have asked experts in Berlin and Paris to come up with reform recommendations for both countries in an apparent attempt to avert a full-blown clash between the eurozone heavyweights over economic policy.

The German and French economy ministers have asked experts in Berlin and Paris to come up with reform recommendations for both countries in an apparent attempt to avert a full-blown clash between the eurozone heavyweights over economic policy.

In letters signed by Sigmar Gabriel and Emmanuel Macron, the two ministers note that the European recovery is lagging that of other advanced economies, raising the risk of a "lost decade" of weak growth, excessively low inflation, high debt and high unemployment.

The letters ask Henrik Enderlein, head of the Jacques Delors Institut in Berlin and a professor at the Hertie School of Governance, and Jean Pisani-Ferry, a French government adviser and former head of the Brussels-based Bruegel think tank, to compile a report by mid-November with concrete reform proposals.

"As the two largest economies in Europe, France and Germany have a particular responsibility and a critical role to play to ensure both a rapid recovery and a strong and sustainable growth going forward," Gabriel and Macron write.

By asking the two experts to make reform recommendations for both countries, the ministers seem intent on defusing an escalating war of words between Berlin and Paris, in which German officials have repeatedly lectured France on the need for more hard-hitting economic reforms.

France announced earlier this month that it would not bring its deficit down within European Union limits until 2017, four years later than originally pledged, setting up a confrontation with the European Commission.

Full article on Reuters

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