France blames elections for German stimulus dispute

AIX-EN-PROVENCE, France, July 5 (Reuters) - The disagreement between France and Germany over fiscal stimulus is due to the different electoral calenders in each country, French Economy Minister Christine Lagarde said on Sunday.

Germany has voiced concern that large amounts of money being pumped into markets through stimulus measures could eventually produce an inflation crisis.

Inflation is an especially sensitive issue in Germany because of its history with hyperinflation in the 20th century. Germany holds federal polls in the autumn.

Germany's view is in stark contrast with that of France, where President Nicolas Sarkozy has just said he wants to issue a national loan next year to support further stimulus measures.

Economists say that since Sarkozy plans to target slow-burning investment projects, the impact will not be felt until 2011, the year before the next presidential elections.

"We are starting from different bases. We are in different electoral calendars," Lagarde told reporters on the sidelines of a conference.

Some economists say the differing opinions between France and Germany about how to respond to the crisis sends a worrying signal about policy coordination between the euro zone's two largest economies.

But Lagarde said there was no need for concern. "I am not worried because we believe together in the (European Union growth and) stability pact," she said.

Germany might have to follow a similar path to France, she said.

"I would be surprised if other European countries, including Germany, don't also have to identify their national priorities in a perspective of sustained growth for generations to come," she said.

"I think it's a strategic debate that we should have together." (Reporting by Anna Willard, Marie Maitre and Matthieu Protard; Editing by Louise Ireland)