French industry losing ground to Germany: report

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French industry is no longer competitive with Germany's, a report to the Paris government warned on Thursday, calling for a national pact between firms and employees to reduce costs.

"The gap in industrial competitiveness has not stopped growing since 2000. French exports were then around 55 percent as great as Germany's, now they're only 40 percent," the COE-Rexecode institute said.

The think tank is close to French employers and its report was submitted to Eric Besson, minister for industry in President Nicolas Sarkozy's government.

"Germany has undertaken deep reforms, reduced payroll costs and adopted a competitiveness policy that has been accepted by public opinion. France chose an across-the-board reduction in working hours," the report complained.

"This restriction increased costs linked to salaries and made it harder for firms to adapt," it said.

Having received the report, Besson's office asked the National Industrial Conference (CNI), which represents business leaders, lawmakers and trade unions, to draw up by May 30 proposals to increase competitiveness.

© 2011 AFP

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