European Union finance ministers have wrapped up two days of talks in which they have focused on multiple risks to the region’s economy from the global credit crunch to the surging euro and oil prices.
They also talked about – but failed to reach agreement on – funding for the EU’s satellite-navigation system Galileo and proposed changes to value-added tax.
But it is the negative effects from the strong euro that Euro Group president Jean-Claude Juncker said worries them: “Exchange rates should reflect economic fundamentals and excess volatility and disorderly movements in exchange rates are undesirable for economic growth. In particular, recent sharp moves in foreign exchange rates are unwelcome.”
As well as the weak dollar, the finance ministers are concerned about China’s state controlled currency, the yuan, and are pressing Beijing for action.
The yuan has gained just over 5% against the dollar this year, but dropped almost as much against the euro, hurting Europe’s exporters.