Connect to share and comment

Hollande cautions on euro after recent rise

PlacardEnlarge
(Globalpost/GlobalPost)

French President Francois Hollande said on Tuesday the euro's value cannot not be left to the whims of the market, adding his voice to concerns over the recent sharp rise in the currency.

The euro should not be allowed to "fluctuate depending on the markets' mood," Hollande told the European parliament and the 17-nation eurozone needs "to reflect on the place of our currency in the world."

He said: "A single currency zone must have a foreign exchange policy otherwise it will see an exchange rate imposed on it (by the markets) which is out of line with its real competitive position."

French Finance Minister Finance Minister Pierre Moscovici said on Monday that Paris was concerned about the euro's recent rise but would rather seek a dialogue on the issue than "launch an offensive" on the issue.

"There is no French government strategy to call into question or launch an offensive on the question of foreign currency rates," Moscovici said.

The euro has strengthened sharply in the past few months as the eurozone appeared to have finally got the better of a debt crisis which at one stage looked likely to sink the whole project.

On Friday, the single currency hit $1.3711, a level last seen in mid-November 2011, stoking concerns that it could begin hurt exports, a key growth driver at a time when the overall eurozone economy is struggling badly.

The central statutory obligation of the European Central Bank, which is independent in managing monetary policy, is to ensure price stability.

cel/bmm/hd

http://www.globalpost.com/dispatch/news/afp/130205/hollande-cautions-euro-after-recent-rise