France says Germany now backs its econ policy stance

Germany appears to be coming round to the French view that euro-zone countries should coordinate their economic policies, two senior French officials said on Monday after meeting the German economy minister.

Patrick Devedjian, minister in charge of implementing France's stimulus plan, and European Affairs Minister Bruno Le Maire, were in Berlin to explain a French plan to give its carmakers a 6 billion euro ($7.68 billion) state loan in return for an unwritten pledge not to close French sites.

Fellow euro-zone members, including Germany, have voiced concerns that the car aid could distort competition and new German Economy Minister Karl-Theodor zu Guttenberg said last week he was "not uncritical" of the Paris steps.

Devedjian and Le Maire told a small group of reporters after meeting Guttenberg that the German minister had voiced support for a long-standing French drive to boost economic policy coordination in the euro zone.

"I think we are closer to a consensus on a position that France has always defended, namely that one cannot have an integrated monetary policy without coordination of economic policy," Le Maire said.

Devedjian added that Guttenberg had "perfectly met our expectations" by voicing support for tight coordination on economic policy.

In the past Germany has resisted French attempts to establish formal structures within the euro bloc to coordinate economic policy, fearful that Paris could use such forums to exert political pressure on the European Central Bank.

Asked by Reuters whether Germany had shown any signs it would now support regular meetings of euro zone leaders to discuss economic policy, Devedjian said: "We will start by exchanging information, then we will try to establish a working group, but it will certainly go beyond that. That is what we are hoping."