Eurozone for tougher line for G7 meet
The eurozone wants a tougher line on exchange rates from finance chiefs from the G7 countries when they meet in Washington.
By Agencies |
BRUSSELS: The euro's recent record strength will be in focus on Monday when finance ministers from the 13-nation eurozone meet in Luxembourg to hammer out a joint message to take to an upcoming G7 meeting.
The eurozone wants a tougher line on exchange rates from finance chiefs from the Group of Seven richest countries when they meet in Washington, according to the chairman of the Eurogroup of finance ministers, Jean-Claude Juncker.
The G7 gathering is tentatively scheduled for October 19. Successive G7 finance ministers meetings have concluded with well-worn statements describing "excessive volatility" on foreign exchange markets as "undesirable" despite a steady decline in the dollar's strength in recent years.
But with the euro on a record-smashing run, eurozone members are becoming increasingly impatient for the United States, Japan and China to take more action to strengthen their currencies.
While Paris has long decried the euro's strength, the chorus of concern has grown since the shared European currency struck a historic high of 1.4283 dollars last Monday.
"Given the current level of the euro against the dollar, others are discussing the subject. The debate is open," said a spokesman for French President Nicolas Sarkozy.
Italian Prime Minister Romano Prodi acknowledged last week he was "concerned" about the euro's strength and accused the United States of looking only after its "domestic interests" in its exchange rate policy.
The eurozone wants a tougher line on exchange rates from finance chiefs from the Group of Seven richest countries when they meet in Washington, according to the chairman of the Eurogroup of finance ministers, Jean-Claude Juncker.
The G7 gathering is tentatively scheduled for October 19. Successive G7 finance ministers meetings have concluded with well-worn statements describing "excessive volatility" on foreign exchange markets as "undesirable" despite a steady decline in the dollar's strength in recent years.
But with the euro on a record-smashing run, eurozone members are becoming increasingly impatient for the United States, Japan and China to take more action to strengthen their currencies.
While Paris has long decried the euro's strength, the chorus of concern has grown since the shared European currency struck a historic high of 1.4283 dollars last Monday.
"Given the current level of the euro against the dollar, others are discussing the subject. The debate is open," said a spokesman for French President Nicolas Sarkozy.
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Italian Prime Minister Romano Prodi acknowledged last week he was "concerned" about the euro's strength and accused the United States of looking only after its "domestic interests" in its exchange rate policy.
The president of the BusinessEurope association of EU employers, Ernest Antoine Seilliere, urged Juncker "to raise your voice and defend euro area interests" at the upcoming G7 meeting.
Juncker, who is also both Luxembourg's prime and finance minister, recently told AFP that the eurozone would "without a doubt" step up pressure on Europe's G7 partners in Washington.
Juncker said the United States, China and Japan "should match their words and their deeds" when Washington repeats its well-worn strong dollar policy and Beijing and Tokyo say that exchange rates should reflect the health of their economies.
"We will see at the next G7 meeting at the end of October in Washington if our partners agree to follow their words up with consequential acts," he told AFP.
But German Finance Minister Peer Steinbrueck, whose economy is the biggest in Europe, has kept silent in recent days about taking a harder line on exchange rates, but has said in the past that he "loved" a strong euro.
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While it remains to be seen if Berlin will go along with any tougher rhetoric, one senior EU official predicted "a lively discussion" when eurozone finance ministers sit down on Monday to work out a common position to take to the Washington meeting. But analysts at Italian bank Unicredit doubted the G7 meeting would have much effect on currencies, even if Europe convinced its partners to take action on exchange rates.
"Despite interim profit-taking, the euro is tending higher, while the dollar remains shaky," they wrote in a research note on Friday.
"Not even growing political pressure in the eurozone or the (G7) meeting being held in two weeks will likely change this situation soon," they added.
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Eurozone finance ministers are to be joined on Tuesday at the Luxembourg meeting by their counterparts from the full 27 European Union members for talks focusing on public finances.Download
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