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Tuesday, May 13, 2003

Everything For the Best

The EU finance ministers have gotten together and convinced themselves, probably in the absence of their ability to convince anyone else, that the rise in the euro is a good thing. It is called folly, isn't it? And it is a scandal.

Finance ministers from Europe's single currency area on Monday night insisted that a strong euro was good for the EU and for the global economy. The statement came after the euro climbed within sight of its January 1999 launch rate of $1.1750, sparking renewed concern about the eurozone's competitiveness. The single currency briefly touched four-year highs above $1.16, fuelled by comments from John Snow, US Treasury secretary, that the dollar's decline was helping US exporters.But the 12 eurozone finance ministers, meeting in Brussels, said the rise in the euro helped to control inflation in the EU and forced exporters to become more competitive. Nikos Christodoulakis, the Greek chairman of Monday night's eurogroup meeting, said: "Strength is very useful because it reflects the economic fundamentals which pertain in the European economy."Pedro Solbes, EU monetary affairs commissioner, said volatility was a problem, but added: "On balance, a strong euro is in the interests of the euro area and the global economy."
Source: Financial Times

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