French call for action over euro wins little support

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French call for action over euro wins little support

French call for action over euro wins little support
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Eurozone finance ministers have agreed to put the thorny question of the euro’s value to the G20 meeting in Moscow later this week.

Finance ministers and central bankers from the world’s biggest 20 economies will meet there on Friday and Saturday.

The single currency has risen sharply in recent months, and France and Germany disagree over what to do about it.

The French want the European Central Bank to consider setting a target for the euro, bringing it down when it gets too high.

In Brussels the French finance minister Pierre Moscovici repeated the message, calling for “strong action”.

“We must ensure we curb stock price volatility or erratic movements that have a lasting negative effect on the economy if they carry on… we need a co-ordinated approach,” he said.

The call appeared to win little support. Germany is opposed to interference in exchange rate policy.

“We will push this at the G20 meeting in Moscow within the G20 framework. The exchange rate problems don’t only exist in and with the euro but there are concerns with other big currencies,” said German Finance Minister Wolfgang Schäuble.

A stronger euro hurts exports because it makes them more expensive abroad. France is said to be particularly sensitive. Moscovici has warned that if the euro continued to appreciate at the current rate, it would take 0.3 percentage points off the country’s economic growth.

This comes as the eurozone is pinning its hopes on demand from Asia and America to drag it out of its second recession since 2009.