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Concern Mounts in Berlin as French Political Crisis Peaks

Merkel Hollande
The German chancellor, Angela Merkel, has expressed concern about France's economic troubles. Here, with President Francois Hollande in April in Brussels.
  • Why it matters

    Why it matters

    France, Europe’s second-largest economy, is mired in an economic crisis as its beleaguered President Francois Hollande fights political opponents.

  • Facts

    Facts

    • France expects its economy to grow only 0.5 percent this year from 2013.
    • France is Europe’s second-largest economy and Germany’s biggest trading partner.
    • President Francois Hollande’s popularity rating is only 17 percent.
  • Audio

    Audio

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The Franco-German relationship, long an anchor of stability in the European Union, appeared poised to be entering a new rockier phase amid French political gridlock styming reforms.

The move came as the French prime minister, Manuel Valls, offered to dissolve his cabinet, which had deadlocked over budget cuts needed to right the country’s flagging economy.

The French President Francois Hollande, who is personally unpopular in France, accepted Mr. Valls’ request on Monday amid rising antipathy against Germany, which has pushed France and other euro countries to adopt austerity measures.

Over the weekend, before the cabinet was dissolved, the French economics minister had openly criticized Germany at a party rally in France.

Arnaud Montebourg, an outspoken left-wing member of the Socialist Party, had frequently complained about the austerity measures demanded by Germany.

On Sunday, he blamed the “obsessions of the German right” for leading France down a “blind alley.”

On Monday an exasperated Mr. Hollande, who has long struggled to convince left-wing ministers to accept economic restraint, asked Prime Minister Valls to form a new cabinet that excluded the dissenting ministers.

Mr. Hollande came to power in 2012 on an anti-austerity ticket, promising to find a French, rather than a German, solution to the country’s economic problems. He promised to ally France with southern European countries such as Italy also opposed to the northern European focus on belt tightening.

But the French economy has continued to decline.

It stagnated in the first two quarters of this year and early this month France cut its growth forecasts for both 2014 and 2015, while also indicating it would not meet its public deficit target this year.

Unemployment remains stubbornly high at 10.4 percent, almost twice that of Germany. The trade deficit continues to point to a struggling business landscape. In the first half of 2014 it was €29.2 billion ($38.5 billion). In the face of this weakening economic climate, Mr. Hollande has all but abandoned his election promises, making him the most unpopular French president ever, with just 17 percent public support.

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