France wants euro rate discussed at Eurogroup, G20 talks

PARIS Wed Feb 6, 2013 3:22pm GMT

France's Economy and Finance Minister Pierre Moscovici speaks during the questions to the government session at the National Assembly in Paris February 5, 2013. REUTERS/Charles Platiau

France's Economy and Finance Minister Pierre Moscovici speaks during the questions to the government session at the National Assembly in Paris February 5, 2013.

Credit: Reuters/Charles Platiau

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PARIS (Reuters) - France will raise concerns about the strength of the euro's exchange rate at talks among euro zone finance ministers next Monday and at a mid-February meeting of G20 economic powers, Finance Minister Pierre Moscovici said.

After President Francois Hollande called for agreement on a medium-term exchange rate, Moscovici said a 6.5 percent rise in the euro's value over six months could, if it lasted over a year, snip 0.3 percentage points off annual growth.

France's Socialist government is predicting growth of just 0.8 percent this year and many economists already consider that optimistic.

"The euro's level is not a negligible matter for growth," Moscovici told reporters on the sidelines of a business fair on Wednesday.

"Even if there must be no pressure on the European Central Bank, discussing among Europeans what might constitute a fair level for our currency and how to get there is legitimate, and it is also legitimate among other big countries and economic zones, at the G20," he said.

Hollande raised the matter in a speech to the European Parliament this week ahead of a European Union summit that takes place in Brussels on Thursday and Friday.

"The euro zone must, through its heads of state and government, decide on a medium-term exchange rate," Hollande told journalists at a press conference after the speech.

His finance minister said he would broach it with other euro zone finance ministers at a meeting next Monday and then at Russian-chaired talks among G20 ministers on February 15 and 16.

Germany, which has traditionally distanced itself from French gripes about the euro, did so again within minutes of the remarks from Moscovici.

A German government spokesman said that the euro was not overvalued and it was sensible for financial markets to determine exchange rates.

The euro has been trading in recent days at around $1.35, higher than any time since late 2011.

(Reporting by Jean-Baptiste Vey. Writing By Alexandria Sage and Brian Love; editing by Ron Askew)

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Comments (1)
SCSCSC wrote:
And finally France realises that it is locked into a “burning building with no windows and doors”.

France is in desperate trouble and cannot devalue to assist competitiveness. France – you designed this flawed model and have bullied other European nations into joining and sticking to it.

Monsieur Hollande, this is not a “a la carte” Europe where rules only seem to apply to some and not others.

Feb 06, 2013 2:29pm GMT  --  Report as abuse
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