Brussels, 20/01/2004 (Agence Europe) - The Ministers of the Economy and Finance of the euro zone Member States adopted, on Monday evening in Brussels, a declaration in which they express concern about the "excessive" movements of exchange rates. Eurogroup issued this declaration in the context of preparing for the meeting of Finance Ministers of the seven wealthiest countries of the planet - the G7 Finance - on 6 and 7 February in Boca Raton, in Florida (United States).
The declaration states that, as far as exchange rates are concerned, their long term strategy remains unchanged. The euro must maintain its medium and long term value in line with economic fundamentals, according to the terms of reference adopted by the euro zone ministers. In the text which is almost identical to the declarations made last week by the President of the European Central Bank (ECB), Jean-Claude Trichet, the Twelve added that, under these circumstances, they particularly insist on stability and are concerned by the excessive movements of exchange rates. They also state that they will continue to closely monitor the situation and to conduct policies for supporting economic recovery in a stable macro-economic environment. After having long declared that a strong euro was in the interest of the euro zone, the Eurogroup has thus somewhat changed its view by warning against sudden movements by the European currency on the exchange market.
Ministers, however, are not exactly in tune as far as the acceptable level of single currency goes. While France has clearly expressed its concern on the subject of the level of the euro, other Member States, including Belgium and Austria, say they are relatively pleased with its current level (according to these countries, a strong euro allows, for example, for the high price of oil to be offset as oil is bought in dollars on international markets). "I think things are quite correct for now", Belgian Minister Didier Reynders said on his arrival at the Eurogroup meeting. "I said on several occasions last week that we need a strong euro based on a strong economy, and that I would be worried if we entered the most dangerous areas at around $1.30", Mr Reynders added. He felt that "if we approached this zone, the only margin of manoeuvre left would be on the monetary and not budgetary side". His Austrian counterpart, Karl-Heinz Grasser, also said that the euro zone could get used to its current currency level, while saying he was more concerned by the current speed of exchange rate fluctuations. "In my view, the problem of the euro is overestimated", he said. "If we consider the level of the euro compared to the dollar over the last 30 years, we realise that the average is around $1.20. We are not very far from this", he went on, concluding: "What we must bear in mind is the speed of adjustments". The Finnish Minister, Antii Kalliomaki, for his part, stressed the need for the euro to regain a stable level after its recent rise compared to the dollar.