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French: Low German wages are unfair on us

A French economy minister has launched a scathing attack on Germany’s ‘unfair’ wage policy “which he claims is based on who can pay workers the least”. The attack was timed just days before the Germans goes to the polls.

French: Low German wages are unfair on us
Photo: DPA

France’s consumer affairs minister Benoît Hamon slammed Germany’s policy of keeping pay artificially low for being “unfair” on France.

Speaking to the BBC on a visit to an Optic 2000 factory, which creates eyewear in France, Hamon said “some countries in Europe are getting around employment directives and underpaying their workers.”

Hamon lamented Germany’s wage policy, which has helped keep the cost of German products down compared to “Made in France” goods.

“I want Germany to have a social policy where competitiveness doesn’t rely on jobs paying €400 a month,” he said.

“I want Germany not to base its agricultural economy on salaries of seven euros an hour. That’s what I want from the next German government.

“I want it to play fair with an economic model that isn’t based on a competition for who can pay workers the least.

“We are pitting workers at seven euros against those who earn 10, 11 or 14 an hour. That can’t work within the same territory. It’s not possible. It can’t work,” Hamon said.

France is struggling to kick-start its economy and the Socialist government has made a big push to promote the “Made in France” brand to try to boost its manufacturing industry.

But the high cost of wages compared to its neighbours on the other side of the Rhine river means France has lost its competitive edge to Germany in recent years.

Hamon does have a history of launching barbs at Germany. Earlier this year, he targeted Chancellor Angela Merkel, claiming her austerity policy had failed.

Should Germany introduce a national minimum wage? Take part in our debate here

Thomas Klau from the European Council on Foreign Relations in Paris told The Local that Hamon does have a fair point when it comes to wage policies.

“There are examples in certain industries where low wages have helped give German firms an advantage over French ones, such as abattoirs.

“They have paid mainly temporary migrants from Eastern Europe €5 an hour to work and live in conditions of extreme poverty. But under French law, abattoirs are not allowed to pay such miserly wages, which has helped the ones in Germany to flourish.

“In an area like the Eurozone the wage policies of each country can have a heavy impact in other countries.

“This means the agreement that member states are free to compete with each other is often a race to the bottom, where working conditions, for example, are not compatible with the kind of Europe we want,” Klau said.

With Germany facing elections on Sunday and current Chancellor Angela Merkel’s main opponent Peer Steinbrück vowing to introduce a statutory, national minimum wage, Hamon’s attack appears perfectly timed.

Ben McPartland

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BUSINESS

France’s EDF hails €10billion profit, despite huge UK nuclear charge

French energy giant EDF has unveiled net profit of €10billion and cut its massive debt by increasing nuclear production after problems forced some plants offline.

France's EDF hails €10billion profit, despite huge UK nuclear charge

EDF hailed an “exceptional” year after its loss of €17.9billion in 2022.

Sales slipped 2.6 percent to €139.7billion , but the group managed to slice debt by €10billion euros to €54.4billion.

EDF said however that it had booked a €12.9 billion depreciation linked to difficulties at its Hinkley Point nuclear plant in Britain.

The charge includes €11.2 billion for Hinkley Point assets and €1.7billion at its British subsidiary, EDF Energy, the group explained.

EDF announced last month a fresh delay and additional costs for the giant project hit by repeated cost overruns.

“The year was marked by many events, in particular by the recovery of production and the company’s mobilisation around production recovery,” CEO Luc Remont told reporters.

EDF put its strong showing down to a strong operational performance, notably a significant increase in nuclear generation in France at a time of historically high prices.

That followed a drop in nuclear output in France in 2022. The group had to deal with stress corrosion problems at some reactors while also facing government orders to limit price rises.

The French reactors last year produced around 320.4 TWh, in the upper range of expectations.

Nuclear production had slid back in 2022 to 279 TWh, its lowest level in three decades, because of the corrosion problems and maintenance changes after
the Covid-19 pandemic.

Hinkley Point C is one of a small number of European Pressurised Reactors (EPRs) worldwide, an EDF-led design that has been plagued by cost overruns
running into billions of euros and years of construction delays.

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