French economy minister criticises German trade surplus

French Finance Minister Christine Lagarde (photo) said in an interview to the Financial Times that she doubts Germany's trade surpluses may be a "sustainable model" for the Eurozone. Her comments come as European finance ministers meet on Monday.

By News Wires (text)

AFP - French Finance Minister Christine Lagarde has said Germany's trade surpluses may be unsustainable for its neighbours in the eurozone, in an interview published Monday.

"(Could) those with surpluses do a little something? It takes two to tango," she told the Financial Times newspaper.

"Clearly Germany has done an awfully good job in the last 10 years or so, improving competitiveness, putting very high pressure on its labour costs," she said.

"I’m not sure it is a sustainable model for the long term and for the whole of the group. Clearly we need better convergence."

Lagarde also said a European monetary fund (EMF) to help eurozone nations in crisis -- an idea supported by German Finance Minister Wolfgang Schaeuble -- was not a priority for the euro area.

The idea has been mooted in the wake of the Greek debt crisis.

She said the eurozone should first ensure Greece sticks to its promised austerity measures, then show "a bit of creativity and innovation" and use current European Union rules to strengthen budgetary discipline.

Her comments come as European finance ministers meet Monday to discuss helping debt-laden Greece.

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Date created : 15/03/2010

Comments (4)

France needs courageous policies

by Steve (not verified) - 18/03/2010 - 20:35

This Minister is a comic. Germany struggled hard to achieve a national concensus between industry and unions, she also reduced the taxes that stifle employment by hiking VAT. Notice the word "Concensus". France could achieve the same if there was a will to sacrifice for the common good. No, instead Germany should undo all it has achieved. Is it any wonder that there is a rumour that the French are selfish?

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Envious at Germany's success?

by Anonyme (not verified) - 16/03/2010 - 18:36

Since when is a trade surplus a bad thing? I think we should applaud Germany for achieving a favorable trade balance in difficult economic times and use this as an example to follow...