From European perspective, yes, it is good to have a strong currency especially to control inflation, but won't it affect exports? Why ECB and other leaders are keeping quiet? Is it not affecting exports from Euro zone, especially for industries like AirBus etc...
At the least, I thought, European leaders would make some noise about the rapid appreciation of their currency, but their silence has left me dumbfolded...
Since becoming President of France, Nicolas Sarkozy has been openly critical of ECB Prez Trichet. In an unprecedented move, Sarkozy attended a meeting of Eurozone Finance Ministers to lobby for a weaker Euro.
google.de
Germany has an export oriented economy with its main customers:
France 9.7%,
US 8.6%,
UK 7.3%,
Italy 6.7%,
Netherlands 6.2%,
Belgium 5.5%,
Austria 5.5%,
Spain 4.7% (2006)
source:
cia.gov
Germany is also benefitting from increased exports to China from its small and medium sized companies in the precision machinery industry.
As you can see, the bulk of Germany's exports are inside of the Eurozone. Up to this point US imports have not been deterred by a weak dollar.
Thus, it is in France's interest to have a weak Euro, but Germany would like to have a strong Euro. This is a huge political issue within the Eurozone currently. |
