The German economic and political Establishment bombarded France’s Christine Lagarde with withering criticism yesterday. Lagarde herself admits that things are ‘tense’ between the two nations.

Christine Lagarde having opined that Germany should raise its domestic consumption and help Eurozone partners (eg France) to boost exports, every Big Bertha north of the Maginot Line went into battle against her yesterday.

Germany’s CBI equivalent the BDI swatted the suggestion as “obsolete in an age of globalisation and open markets”, suggesting that Lagarde was distracting attention away from internal French problems. BDI chief Werner Schnappauf bluntly told the media “Our success reflects the competitiveness of German companies in global markets. We will not give in to weaker nations”. He added that ‘other countries’ (eg France) should “improve their competitiveness through tough reforms and wage policies founded on productivity”.

Lagarde admitted later that she found discussing “German stability policy” with her German counterpart Wolfgang Schäuble “very sensitive” and “not one we discuss readily”.

The problems between the two nations have been bubbling under for a year or two now. Many Germans have become resentful of the huge subsidies gobbled up by France over the years. A senior German banker told The Slogger two years ago:

“We took the Ostis [East Germans] on board without any help from anyone. We gave the French guilt-money for decades. But their economy is as protectionist and subsidised as ever. Enough is enough. Things will have to change”.

The fundamental problem is that Germany has embraced market liberalisation, and France hasn’t. There were hopes to the North that Sarkozy might change things, but French trade unions have remained obdurate, and despite a modest privatisation programme, the efficiency ethic isn’t there in the Gallic culture.

As a dispute, the now overt recriminations both reflect the differences in national attitude between the pair – and act as a taster for what is to come more widely in the EU.