By Ian Dunt Follow @IanDunt
Angela Merkel called David Cameron in his home today, after another attack from France talking down the British economy.
The comment appears to mark a co-ordinated attempt to belittle the British economy, coming hot on the heels of Banque de France governor Christian Noyer saying credit rating agencies should downgrade the UK.
"It's true the economic situation of the UK is very worrying, and one prefers to be French than British in terms of the economy at the moment," French finance minister Francois Baroin said on radio station Europe 1 today.
Mr Cameron issued a sly dig back at the French president, who earlier this week called him an "obstinate kid", in a question and answer session following a speech.
"People tell me it's much easier to be Jewish or Muslim here in Britain than..in a secular country like France," the prime minister said.
Meanwhile, Nick Clegg told French prime minister Francois Fillon that the remarks about the UK credit rating were 'unacceptable'.
Mr Fillon reportedly pledged to Mr Clegg that spokespeople in France would cool the rhetoric being aimed Britain.
The comments come just as there were signs of improvements in British-European relations, with the UK being invited to observe negotiations over a fiscal pact.
While the UK will not be able to vote on the proposals, it has been asked to take part in "technical discussions", just not as an "active participant".
Ms Merkel called the prime minister at his constituency to welcome the news – their first conversation since he vetoed the fiscal consolidation plan last week.
Labour was less supportive with shadow foreign secretary Douglas Alexander saying Mr Cameron was being "forced to backtrack".
He added: "Accepting limited participation in technical discussions will not give us any leverage where it really matters.
"While the Czechs and Hungarians are negotiating hard from a position of strength, David Cameron has deliberately chosen to sit on the sidelines, forced to lobby others to do his work for him."
The invitation appears to have come following a phone call between European Council president Herman van Rompuy and Mr Cameron last night.
Mr Cameron "reiterated he wants the new fiscal agreement to succeed and to find the right way forward that ensures the EU institutions fulfil their role as guardian of the EU treaty on issues such as the single market", Downing Street said.
Britain will also take part in an informal meeting of all 27 EU members next month to improve economic performance.
Meanwhile, the Daily Mail reported that talks between Nick Clegg and City lobbyists have prompted calls for financial sector representatives to lobby the government to change its policy on the European fiscal initiative.
Mr Clegg was joined by energy secretary Chris Huhne, business secretary Vince Cable and chief secretary to the Treasury Danny Alexander in talks with City lobbyist Roland Rudd, according to the report.
The lobbyist then asked blue-chip companies to write to the government demanding it "re-engages" with Brussels.