Germany attacks French-Libyan nuclear deal-paper

BERLIN, July 26 (Reuters) A senior official in Germany's foreign ministry today attacked a new nuclear energy deal between France and Libya, saying it was politically problematic and could hurt German interests.

During a visit to the North African country by French President Nicolas Sarkozy yesterday, the two countries agreed to cooperate on the installation in Libya of a nuclear reactor to supply drinking water from sea water.

''Politically, this business is problematic,'' State Secretary Gernot Erler told Friday's edition of Handelsblatt newspaper according to an extract released in advance.

German Chancellor Angela Merkel and Sarkozy have much in common but there is a wariness in Germany about some of the French president's ideas, including his efforts to weaken the euro and calls for more political influence over the European Central Bank.

Erler said the Libya deal was not just a bilateral matter and accused the French government of acting against German interests, said Handelsblatt.

''German interests are directly affected,'' he said, mentioning conglomerate Siemens which has a 34 per cent stake in Framatome, a nuclear power joint venture it has with France's Areva.

An aide to Sarkozy indicated that Areva, the world's biggest maker of nuclear reactors, might supply the reactor.

Erler said European security interests could be affected by the export of nuclear technology and the two European governments needed to discuss the matter.

Libya ended decades of international isolation in 2003 when it agreed to halt a weapons programme prohibited by the United Nations and pay compensation for the bombing of a US airliner over Scotland in 1988.

Reuters SY GC2302