Tension Builds Over Currency Gap
Germany Seeks G-20 Plan
To Address Falling Dollar;
Europe, U.S. Are Far Apart
By G. THOMAS SIMS in Frankfurt, SEBASTIAN MOFFETT in Tokyo and ANDREW BROWNE in Hong Kong
Staff Reporters of THE WALL STREET JOURNAL
November 19, 2004; Page A2
FRANKFURT -- In a sign of the rising angst and heightened trans-Atlantic tensions over the weakening dollar, Germany yesterday called for a global plan to avoid a potential currency crisis.
No such agreement is expected from this weekend's meeting of top finance officials from the Group of 20 leading industrialized and emerging economies in Berlin. The divide with the U.S. is too great, as Washington has signaled its willingness to let the dollar weaken, and currencies are expected to be discussed primarily on the sidelines.
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Economists say the dollar's weakening isn't yet a crisis that is affecting markets and growth negatively. "But if current trends continue, and everyone regards the dollar as a one-way bet, then we will end up with a crisis," said Julian Callow, chief European economist with Barclays Capital in London.
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Snow Reiterates Stance
U.S. Treasury Secretary John Snow, speaking in Warsaw yesterday, reiterated the U.S. stance. "I think everyone knows what our position is: the strong dollar, currencies set in open markets," Mr. Snow said, declining to comment further.
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