Europe’s traditional strong-currency countries resisted France’s calls for concerted action to bring down the rising euro, saying it’s up to markets to set exchange rates.
Officials from Austria, the Netherlands, Finland and Luxembourg pushed back against French Finance Minister Pierre Moscovici’s plea for a coordinated international offensive to adjust currency values.
“An artificial weakening would be inappropriate,” Austrian Finance Minister Maria Fekter told reporters before a meeting of euro ministers in Brussels today. “We’re at a happy medium. The euro has been much stronger and much weaker. From my point of view, the excitement about the exchange rate is unjustified.”
Divisions within the 17-nation euro region may lessen the impact of any effort to criticize Japan for seeking to depress its currency at meetings of international financial policy makers in Moscow later this week.
The euro has outperformed the world’s nine other leading currencies in the past six months, rising 7.8 percent, according to the Bloomberg Correlation-Weighted Currency Indexes. The yen has dropped 19 percent as new Prime Minister Shinzo Abe advocated domestic demand-boosting policies.
Moscovici today reiterated French concerns that exchange rates are working against euro-zone exporters, making it harder for the economy to bounce back from the recession it slipped into last year.
“Exchange rates can’t be subject to moods or speculation,” Moscovici said. “I’m pleading for a coordinated approach at the international level.” Without naming Japan, he blamed the euro’s acceleration on “more aggressive practices by some of our partners.”
Past calls for political management of exchange rates -- including by Silvio Berlusconi during his time as Italian prime minister -- have been rebuffed by northern European countries where inflation is a greater concern.
“I’m in favor of free exchange rates,” said Frans Weekers, Dutch state secretary for finance. Luxembourg Finance Minister Luc Frieden said the euro’s rise isn’t damaging the economy, ruling out “any additional, substantial measures.”