UPDATE 2-UK, France clash over their economic performance
By Adrian Croft and Patrick Vignal
LONDON/PARIS Dec 16 (Reuters) - Britain and France clashed over credit ratings on Friday, adding to tensions that erupted over British Prime Minister David Cameron's veto of a treaty on euro zone fiscal integration.
Britain's Deputy Prime Minister Nick Clegg told French Prime Minister Francois Fillon French criticism of the British economy was unacceptable and called for a cooling of the rhetoric.
World Bank President Robert Zoellick said he was "deeply troubled" by exchanges between Britain and France over resolving the euro zone debt crisis.
Differences over the debt crisis affecting both the euro zone and Britain have chilled an initially warm relationship between the eurosceptic Cameron and French President Nicolas Sarkozy.
Relations between the neighbours and age-old rivals grew more tense when Cameron refused to sign up a week ago to a European summit deal on the euro zone's debt crisis calling for a tougher deficit and debt regime.
The decision left Britain isolated among the 27 EU members.
Finance Minister Francois Baroin had earlier joined a chorus of French criticism of the British economy.
"The economic situation in Britain today is very worrying, and you'd rather be French than British in economic terms," Baroin told Europe 1 radio.
Fillon raised similar concerns about Britain and the rating agencies on Thursday, saying during a visit to Brazil: "When I look at our British friends, who are even more indebted than us and carrying a bigger deficit, what I see is that the ratings agencies so far don't seem to have noticed."
Clegg's office said Fillon called him from Rio de Janeiro to clarify his comments.
"Fillon made clear it had not been his intention to call into question the UK's rating but to highlight that ratings agencies appeared more focused on economic governance than deficit levels," the statement said.
"(Clegg) accepted his explanation but made the point that recent remarks from members of the French government about the UK economy were simply unacceptable and that steps should be taken to calm the rhetoric. Prime Minister Fillon agreed," it said.
Fillon's office told Reuters that the prime minister had called Clegg to defuse the tension. Fillon "in no way wanted to call into question Britain's rating," his office said.
Clegg, leader of the pro-European Liberal Democrats, Britain's junior coalition partner, has said he was "bitterly disappointed" by the outcome of the EU summit.
The World Bank's Zoellick said on Friday the euro zone's financial and economic problems were "far from solved".
"I have been deeply troubled over the past couple of days to see some of the commentary going across the English Channel, not only comments from France but also from Brussels," Zoellick told an audience at the Atlantic Council in Washington.
Zoellick said it was important in the face of the financial crisis for leaders to act responsibly.
The criticism, with France heading into a presidential election next year, has not been just one way. Some British ministers have also disparaged France's economic performance.
Britain appears to have irked France with its regular calls for the euro zone to act to resolve its debt crisis while at the same time refusing to foot the bill for a euro zone bailout.
Sarkozy's frustration with Cameron boiled over at a summit in October when he told Cameron to "shut up", saying he couldn't understand why Cameron wanted to take part in euro zone meetings when he was so critical of the single currency.
Writing in the London Evening Standard newspaper last month, British Finance Minister George Osborne said: "The markets are even asking questions about France. That's why the French have now had two emergency budgets in four months to try to get ahead of the curve, as we did last year."
Some French leaders are irked that powerful global credit ratings agencies seem to take a rosier view of the British economy than the French, which they consider to be in a healthier state despite the euro crisis.
Standard & Poor's is reviewing France's top-notch AAA rating for a possible downgrade, as part of a wider review of euro zone ratings following the summit deal.
In contrast it said in October it was keeping its AAA rating for Britain's "stable" economy, though this could come under pressure if London strayed off course on planned deficit cuts.
Bank of France chief Christian Noyer attacked ratings agencies this week, saying that if they considered economic fundamentals they should downgrade Britain - which had "as much debt, more inflation, less growth than us" - before France.
Jean-Pierre Jouyet, head of France's AMF markets regulator, said this week that Britain's political right was the world's stupidest, as it served purely financial industry interests and not the national interest.
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