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France weighs into German wage debate

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France weighs into German wage debate
Photo: DPA
10:22 CEST+02:00
Eager to reap the benefits of higher German wages to boost its own economy, France this week threw its weight behind union demands for workers to get a bigger share of the profits of Germany's economic boom.

French Finance Minister Christine Lagarde on Monday seized on remarks by Chancellor Angela Merkel expressing sympathy for workers who had long shown restraint in wage negotiations with employers.

"I have always said that the recovery of the German economy ... would only be a good thing for the eurozone if workers benefit from it through salary increases and if there is consumption," Lagarde told French broadcaster LC1, according to news agency Reuters.

Lagarde has repeatedly criticised Germany in the past for not doing enough to spur domestic demand. Germany's heavily export-driven economy has been helped by the wage restraint of recent years. But many of its neighbours argue it harms their economies by dampening consumer demand in Germany and giving Europe's biggest economy a competitive edge.

Chancellor Angela Merkel said on Sunday: “I hope that we find a common sense solution in which of course the improved situation for businesses is reflected for workers.”

Germany's economy grew 2.2 percent in the second quarter this year, its fastest rate since unification and well above France's modest 0.6 percent growth.

Unions preparing for fresh wage negotiations are using the boom to argue it is time that the rewards were shared more equitably with workers.

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