Brussels, 19/05/2014 (Agence Europe) - The European People's Party (EPP) candidate to become the next president of the European Commission, Jean-Claude Juncker (of Luxembourg), is not ruling out the possibly of Eurogroup giving instructions to the European Central Bank (ECB) if the euro is running at too high an exchange rate.
Juncker, erstwhile head of Eurogroup, said about the euro exchange rate in an interview on Monday 19 May with German newspaper FAZ, that the independence of the ECB was very valuable, but the treaty allows the Commission to offer general guidelines to finance ministers, and then later on, the ECB must do what the eurozone finance ministers tell it to do.
The high euro exchange rate is making it tougher for Europe to export goods to the wider world and is reducing the cost of imports. ECB head, Mario Draghi, has expressed concern on several occasions about the distortedly high euro exchange rate and the low level of eurozone inflation. In June, the ECB will announce new non-conventional measures to encourage prices to rise from the current 0.5%-0.9% range since October 2013. The ECB forecast unveiled in January expects inflation to remain low in 2014 and gradually rise in 2015 to reach the ECB's target of just below 2% only at the start of 2016 (see EUROPE 11081). (MB)