The French Prime Minister, Lionel Jospin, called for an "economic government " for Europe in a speech on Monday.

The Socialist leader made clear he wanted the 12-nation Eurozone to increase its policy co-ordination, including greater harmonisation of taxes.

He also called on the European Union to act more vigorously in defence of workers' rights.

Mr Jospin's speech was strong on the rhetoric of economic solidarity, with its condemnation of so-called "fiscal dumping" and "unfair tax competition".

Social dimension

Ever since the euro's launch, France has sought to create a social dimension to the single currency, a political counterweight to the European Central Bank.

Mr Jospin's call for an "economic government" takes that one step further.

Though he doesn't give details, Mr Jospin clearly wants economic policy to be co-ordinated by a more powerful and higher profile body than the current euro group of finance ministers.

He recommends governments should have to consult each other before taking any decision which has, in his words, "general consequences for the Eurozone".

In another suggestion, Mr Jospin calls for a special fund to help countries if they get into economic difficulty.

German reaction

In Germany, in particular, such ideas will raise eyebrows.

They are likely to be seen as a threat to both the independence of the European Central Bank, and to the rules imposing financial discipline on euro member states.

Mr Jospin also calls for a "social treaty" laying down uniform labour laws and wage policies across the whole European Union.

Company taxes should eventually be harmonised to stop countries competing for foreign investment by offering lower tax rates, he said.

But again these ideas will certainly provoke hostility.

In Britain and some other countries, tax and workers' rights are jealously guarded as the preserve of individual states.