"What the French president presented yesterday is, firstly, courageous," Steinmeier said of the measures announced on Tuesday to cut public spending and business costs.
"That seems to me to be the right way, not only for France, but it can also be a contribution that brings Europe as a whole a bit stronger" out of the region's financial crisis, he added.
He said that in the past Germany, where there has been concern about the slow pace of French reforms, had also needed "some time" to overcome hurdles to achieve an economic and jobs market programme that would spur improvement.
A senior member of Chancellor Angela Merkel's conservatives on Wednesday also welcomed economic reforms announced by Hollande as a marked "paradigm change".
"I would like a Franco-German partnership which can react on behalf of Europe on defence matters... we must demonstrate a joint responsibility for peace and stability in the world," he said.
Hollande said the idea of closer cooperation between the two countries would be raised at a meeting he would hold in Paris on February 19th with Merkel.
Berlin and Paris argue that given budget constraints, European Union countries must pool and share resources to secure Europe's ability to act on security issues.
Germany's former defence minister, Thomas de Maizière, last week took a swipe at France and Britain, accusing them of not pulling their weight in international military interventions.
"When it comes to international engagements, we have several times been more involved than France," he said in an apparent reference to the NATO-led operation in Afghanistan where Germany contributes the third most troops behind the United States and Britain.