Brussels, 03/05/2000 (Agence Europe) - Some Euro-MPs took advantage of Wednesday's exchange of views with Messrs. Noyer and Solbes over the convergence reports on Greece and Sweden (see previous pages) to question, in rather a polemical manner, the Vice-President of the European Central Bank on the ECB's intentions regarding the euro's exchange rate. German Christian-Democrat Mr. von Wogau simply observed that the euro was in a "free fall", whereas the French member of the Green Group, Mr. Lipietz (who wondered if one could not speak of the "collapse" of the European currency and considered that "one has to be much more calm on the subject") strongly criticised the latest decisions of the ECB, that were followed by a further fall in the euro. Both the International Monetary Fund and governments and a "large part of the economic and social community" were against the rise in interest rates decided last week, but the ECB "ignored this opposition" he observed, considering that it was therefore "legitimate that markets should consider that the Bank wanted a certain slowing down of economic growth in Europe", and that capital was leaving the euro. A rise in the interest rates currently means a fall in the euro's exchange rate, he declared.
Mr. Noyer replied: the ECB "has no goal consisting in limiting growth in the euro zone" and, with the latest rise in interest rates it had wanted to "counter inflationary pressures" and pressures towards an additional depreciation of the euro's exchange rate. To maintain the current rhythm of growth without creating an inflationary bubble, "we have to adapt our monetary policy"", he claimed, considering that the real limitation to growth in the euro zone resided in the scope of structural reforms: if the movement towards the reforms continues "with vigour", this growth will continue, he said.
As for British Conservative Mr. Tannock, he wondered if the ECB did not have the "secret desire" to encourage the weakness of the euro to increase the exports of the euro zone and lead to an over-evaluation of the pound, with as result bringing companies like Rover "to their knees". We have no such "secret desire": on the contrary, we have clearly stated that we want a strong euro, and that we are confident that this will happen, Mr. Noyer answered, adding that the level of the pound was an affair that concerned the British authorities, and not the European Central Bank.