Euro too strong and harmful to the European economy

France will continue to advocate the position that the euro is too strong and that it negatively impacts the European economy, stated French Finance Minister Pierre Moscovici on Thursday, building on the relevant messages from President Francois Hollande this week.

Moscovici intends to raise this topic next week at the meetings of Eurozone finance ministers and the G20, which includes the 20 largest developed and developing economies. He emphasizes, however, that Paris is not trying to pressure the European Central Bank (ECB) or provoke an international dispute over exchange rates.

– We just want to convey that the international monetary system needs to be reformed and stabilized so that it is not subject to fluctuations – said the French minister in an interview with radio France Inter. The euro has strengthened by 6.5 percent in the past six months and is now at its highest level against the dollar in 14 months and at its highest level against the yen in two and a half years, he reminds.

– The goal is for Europe to calmly point out the issue of exchange rates, taking care to avoid currency wars or pressure on the ECB – explained Moscovici.

This week, French President Francois Hollande reignited the debate on the euro’s exchange rate by calling for a European agreement on a medium-term targeted exchange rate for the European single currency. His call received a cold response in Berlin, where they traditionally shy away from French complaints that an excessively strong euro harms exports and thus limits economic growth.

Thus, a spokesperson for the German government stated yesterday that exchange rates are determined in financial markets and that Berlin does not believe the euro is too strong.

– We are not necessarily in the same position nor do we represent the same views. I do not hide behind the euro. For France, the most important thing is to become more competitive and productive – responded the French minister.