French Fin Min Calls Stronger US Dollar An Improvement
(Updates with further comments and adds details throughout)
IQALUIT, Nunavut (Dow Jones)--French Finance Minister Christine Lagarde Saturday welcomed the strengthening of the U.S. dollar, suggesting that recent developments could ease tensions that have long-burdened European economies because of a strong euro.
She also stressed the commitment of euro-zone members of the Group of Seven to closely monitor efforts by Greece to mend its public finances, as public debt worries have roiled markets in recent days.
"We always complained about the dollar not being strong enough ... That is clearly an improvement," Lagarde told reporters after a G-7 meeting that was held in Iqaluit, Northern Canada, on Friday and Saturday.
The dollar has recently risen against the euro, which last week took a beating on the back of continued worries over the state of Greece's public finances and other highly indebted European nations such as Spain and Portugal. As the financial crisis pushed the euro higher against the dollar last year, French officials have repeatedly bemoaned the weak dollar, saying a strong euro hurts European exports.
The French finance minister's remarks came as the G-7 said Saturday it was sticking to an earlier stance on currencies laid out at a previous meeting in Istanbul, Turkey, in October. The Istanbul statement said excessive currency volatility has an adverse impact on financial stability, and welcomed efforts by China to move to a more flexible exchange rate regime.
Lagarde said that the G-7 still has a role to play in monitoring foreign exchange fluctuations, despite concerns it is becoming irrelevant due to China not being a member and to the growing importance of the Group of 20 as the world's primary forum for economic discussions.
"I am not sure that the G-20 is currently the right forum to discuss currencies...which is one of the reasons why we think the G-7 is a good forum to keep, even in a renewed format," Lagarde said.
French President Nicolas Sarkozy has vowed that ending the current "monetary disorder" will be one of the G-20's main tasks when France chairs the group next year.
The French finance minister repeated earlier assurances made at the G-7 meeting by European Central Bank President Jean-Claude Trichet that the group's euro-zone members will keep a close eye on how Greece implements plans outlined to fix its finances.
"Euro-zone members of the G-7 have confirmed the substance and the significance of the plan put together by Greece and that they will make sure that the plan is managed," Lagarde said.
-By Nathalie Boschat, Dow Jones Newswires; nathalie.boschat@dowjones.com |
