Main focus of Tuesday, October 9, 2007

The Euro Zone to speak with one voice

The finance ministers of Euro Zone countries met in Luxembourg on Monday, October 8th to examine the issue of the constantly rising euro. They will adopt a common stance at the G7 summit, which will take place in Washington DC from October 19th to 21st. Three Euro Zone nations will be in attendance. But can the Euro Zone exert any real influence on international markets?

Cinco Días - Spain

The business daily is sceptical about the scope for action enjoyed by countries in the euro zone. "[It is pointless] to think that the 13 countries can single-handedly tame the international markets and secure an exchange rate better suited to their economic needs. ... The rise of the euro is the consequence of factors over which Brussels and Frankfurt have no control, like the USA's current account deficit or the irresponsibility and selfishness of Beijing and Tokyo in obstinately undervaluing their currencies. These issues must be addressed in a concerted manner on the international stage. The first opportunity will be the G7 summit next week. Europe, and particularly the euro zone, must approach it with a clear, hard-hitting message that calls for the world's main currencies to strike new balance." (09/10/2007)

» full article (external link, Spanish)
More from the press review on the subject » Economic Policy, » Europe

Le Nouvel Observateur - France

In an interview with William Moray, Agnès Bénassy-Quéré, director of the France-based Centre for Futures Studies and International Information (CEPII), talks about fallout from the strong euro. "Petrol would cost much more with a weak euro insofar as we buy it in dollars. Conversely, the major drawback of the strong euro is that companies become less competitive on export markets. France has a particularly large balance of payments deficit, which explains our leaders' determination to push for a weaker euro. ... If the Euro Area countries managed to agree and speak and with one voice, they would have an impact on our partners. But I doubt whether that would be enough. I feel, for example, that it would particularly difficult to convince Tokyo to revalue the yen. Especially as it is not in Japan's interest to do so, with its inflation rate so low." (09/10/2007)

» full article (external link, French)
More from the press review on the subject » International Relations, » Economic Policy, » France, » Europe
All available articles from » Agnès Bénassy-Quéré, » William Moray

Berliner Zeitung - Germany

Klaus Georg Koch points out that there is no such thing as "the euro exchange rate" because the rate of exchange with the dollar determines only a certain proportion of the trading. "If you want a more precise estimate of the impact of the euro's exchange rate on exports from euro zone countries, you have take into account the weighted average of exchange rates with the different trading partners, and such an analysis will reveal several surprises. For different reasons some currencies like the US dollar, the Japanese yen and the South African rand have depreciated against the euro. The Russian rouble and the Swiss franc have also gone down slightly. Other currencies like the Swedish crown, the Danish crown and the Australian dollar have remained stable against the euro over the past few years. And then there are those that have gained in value like the Norwegian, the Czech and the Slovak crown. Turkey's currency is also on the up. Therefore there can be no talk of a general upvaluation of the euro." (09/10/2007)

» full article (external link, German)
More from the press review on the subject » EU Policy, » Economic Policy, » Germany, » France, » Europe
All available articles from » Klaus-Georg Koch

» To the complete press review of Tuesday, October 9, 2007