April 3, 2014 / 8:07 PM / 4 years ago

Germany's Schaeuble upbeat about 'strong' France

BERLIN (Reuters) - German Finance Minister Wolfgang Schaeuble on Thursday called France a strong nation and pointed to improving economic data there, in supportive comments following a French government reshuffle.

Germany's Finance Minister Wolfgang Schaeuble waits for a family photo during a European Union Finance Ministers informal meeting in Athens April 1, 2014. REUTERS/Alkis Konstantinidis

“France remains a strong country,” Schaeuble told German public broadcaster ARD in an interview recorded on Thursday evening.

France’s new finance minister, Michel Sapin, hinted on Thursday that Paris hoped to secure greater understanding in Brussels for its efforts to win a further delay in its budget target by parachuting his predecessor, Pierre Moscovici, into a key EU economic post.

Schaeuble was not asked in the interview about France’s intention to renegotiate its deficit-reduction deadline with the European Commission.

He said France, which has reshuffled its government after the ruling Socialist Party’s rout in weekend local elections, faced a tough domestic political situation but added that its economic data had been better than expected of late.

Surveys published this week have shown France’s services sector posting the fastest rate of expansion since January 2012 and the manufacturing sector growing at its strongest rate since June 2011.

Schaeuble said while both France and Italy were in need of reforms, they remained stable: “They are not faltering.”

He said Italy, like Germany, needed to make sure that its labor costs remained competitive.

Schaeuble said “quite good progress” had been made on regulation in the banking sector in Europe.

He said while the financial system had become “a lot more crisis-proof”, there was still work to be done on this, adding that shadow banking would therefore be discussed on the sidelines of the International Monetary Fund’s annual spring meeting next week.

Reporting by Gernot Heller; Writing by Michelle Martin; Editing by Mark Trevelyan

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