BERLIN, June 15 Germany's Angela Merkel
criticised France's economic performance on Friday in a growing
war of words with its new Socialist President Francois Hollande
over how to tackle Europe's deepening debt crisis.
Describing her own country as Europe's "stabilising anchor
and growth engine", the centre-right chancellor told German
business leaders that Europe should talk about the growing gap
between the bloc's two biggest economies and traditional allies.
Tension has risen so much that French Prime Minister
Jean-Marc Ayrault felt moved to deny that his country was trying
to form a united front with Italy and Spain against Merkel and
her drive for austerity in the single currency zone.
But Merkel, possibly irritated by Hollande's meeting with
German centre-left opposition leaders earlier this week on euro
zone policy, took what looked like a swipe at his expansive
policy ideas such as a new decree partially lowering the pension
age, which was part of his election campaign.
"If you look for instance at the development of unit labour
costs between Germany and France in the past 10 years, then you
see that at the start of the millennium Germany looked rather
worse or at best as good as our neighbour in a lot of factors,
while the differences have now been growing a lot more strongly,
also a topic that must be discussed in Europe, naturally," she
Hollande, elected last month, has also announced plans to
increase the cost for companies of laying off workers after a
jump in French unemployment - a move German officials and many
economists believe will only exacerbate France's economic woes.
On Friday, Merkel reiterated her view that issuing new debt
to finance economic growth is not sustainable and she again
ruled out a mutualisation of debt, or euro bonds, to tackle the
crisis - a position directly opposite to that taken by Hollande.
Hollande has spoken out in favour of euro bonds and also
insists that Europe needs to do more to revive growth to offset
its German-inspired focus on tackling budget deficits and public