Action not words – that is what the euro zone finance ministers meeting in Brussels are demanding from the US over the weak dollar. America has repeatedly said it supports a strong dollar, but is not taking action to achieve that by cutting its budget and trade deficits. Chairing the meeting, Dutch Finance Minister Gerrit Zalm repeated the standard euro zone line.
He said: “As far as the exchange rate is concerned, ministers agreed that excess volatility and disorderly movements in exchange rates are undesirable for economic growth and in this context the recent sharp moves of exchange rates are unwelcome.” Others were blunter. Luxembourg’s Jean-Claude Juncker said “We want the US to APPLY the policy of the strong dollar.” The ministers say an exchange rate imbalance risks the euro zone’s economic recovery, which is not good for the US either. They will get a chance to tell US Treasury Secretary John Snow that – face to face – when they all gather in Berlin later this week for another economic conference.