France needs fundamental reforms like Germany - PM

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PARIS, Sep 13 (Reuters) Prime Minister Francois Fillon said today France should undertake long-term structural reforms like Germany if it wanted to enjoy the same benefits of economic growth and falling unemployment as its neighbour.

Fillon said Berlin was now seeing the fruits of ''brave reforms'' initiated in 2000 - particularly in the labour market -- and was experiencing good economic growth, decreasing joblessness and reduced deficits.

''These results create a real challenge for France. Why can't we do as well?'' Fillon wrote in an article published on the website of Le Figaro daily.

''The stakes go beyond the short-term. Like Germany did in past years, we must look further and aim higher,'' he said.

The European Commission said this week it expected Germany, Europe's largest economy, to grow 2.4 per cent this year, compared with 1.9 per cent expected for France.

''It's not about the economic results at the end of 2007.

It's about the structural situation of the country, at the end of fundamental reforms that we will have conducted over five years and that we are only just starting,'' Fillon wrote.

Fillon said President Nicolas Sarkozy's government had launched reforms to make the labour market more flexible, begun changes to its university system and would pass further reforms to encourage competition and economic growth.

He said the reforms should not worsen public finances and had to respect European commitments on the budget deficit.

''A renovated Germany, a reformed France: That's one of the keys to relaunch of the European project,'' Fillon said, adding the countries' cooperation would help address challenges such as globalisation, climate change, energy and space projects.

''More than ever, we have all to gain from uniting our efforts,'' Fillon said. ''This does not exclude, in all friendship, a frank dialogue without taboos.'' French and German media have repeatedly reported tension between Sarkozy and German Chancellor Angela Merkel, ranging from their stand on planemaker Airbus to budget policy and France's role in resolving a diplomatic standoff with Libya.

French officials have rejected talk of a crisis.

''The few misunderstandings or prejudices that sometimes appear between our two countries are nothing facing the fertility of our partnerships,'' Fillon wrote in the article.

Reuters SZ VP0018

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