Brussels, 01/10/2007 (Agence Europe) - In an interview published in the French daily, Le Figaro, on 28 September, Joaquin Almunia affirmed that Europe would not remain passive faced with excessive currency volatility. Questioned about France's ability to balance the budget by 2010, the European commissioner for economic and monetary affairs asserted that he did not have any doubts about the country's desire to reach this goal and at this stage ruled out “the use of any specific instruments”.
Mr Almunia admitted that the dollar's fall in value is worrying and said that the eurozone economies are not responsible for this situation insofar as, in contrast to the US and Chinese economies, the current balance of payments in the EU is sound. The commissioner warned that, in these conditions, “if there is a question of making we Europeans being made to pay for the consequences of these imbalances, we cannot be expected to remain passive”. Playing down the seriousness of the situation, he pointed out that he had heard the US repeat the fact that they were not interested in having a low dollar and recalled that some European exporters were suffering from the strong euro. He stressed that oil per barrel was less expensive than a year ago and was also “a sign of investor confidence in the European economy”.
Taking formal note of France's aim to reach a balanced budget by 2010, he refused to comment on the 2008 budget presented this week by Paris. Almunia said that he had no doubts about the will of the French government but did say, however, that the Commission would “maintain its surveillance process” in respect of French commitments made last April. Nonetheless, the commissioner warned that “if in the future, we have to deal with a situation in a justifiable way, we will not hesitate to use a range of measures included in the Treaty, such as early warnings and the opening of an excessive debt procedure”. The commissioner concluded that this would not represent any dilemma for him.
Almunia is concerned about “sovereign funds” controlled by some countries, “We have to be cautious. These funds are becoming very powerful. The value of their assets, already twice as high as those of hedge funds, could quadruple or increase by five times as much in the next few years. We should avoid any protectionism, but at the same time call on governments controlling these funds to demonstrate greater transparency. We do have the right to ask them what assets they want to invest and to what level. This is an important problem that does warrant discussion”. (ol)