German risks rift with France over economic healthcheck demands Although a spokesman for the council dismissed the claims as outside "the council's legal remit," Lars Feld, an economist who sits on the panel, told Reuters: "Concerns are growing given the lack of action of the French government in labour market reforms." France has the second biggest eurozone economy, after Germany, but tension between the two countries has increased since French President Francois Hollande's election in May. On Friday, a Bank of France survey predicted gross domestic product (GDP) would shrink 0.1pc in the last quarter of 2012, pushing France into a technical recession, defined as two consecutive quarters of contraction, as the third quarter is also expected to be negative. Mr Schaeuble has been a close ally of France and has argued firm ties are key to achieving more European integration, a persistent German demand to solve the problems of the euro zone. In August, he and his French counterpart Pierre Moscovici said they would launch a working group in order to make joint proposals on euro zone issues like fiscal and banking union. The German "wise men" panel, which also includes a woman, is not obliged to take up Schaeuble's suggestion. One source said if it decided to do a study, it would likely do so in cooperation with a French institute, rather than on its own.