Bloomberg News

Greece’s Stournaras Says Euro’s High Level Is a Concern

February 06, 2013

Greek Finance Minister Yannis Stournaras said the strength of the euro is a concern even as its current level shows a return in confidence in the 17-nation currency.

“I’m concerned about the high level of the euro,” Stournaras told Bloomberg Television’s David Tweed in an interview in Athens yesterday. “The other side of the coin is that there’s confidence in the euro, despite what’s been said about Grexit, the collapse of the euro zone.”

French President Francois Hollande on Feb. 5 called for government leaders to steer the euro’s exchange rate. The currency rose to a 14-month peak against the dollar this month and the highest in almost three years against the yen, making it harder for exporters to sell goods abroad.

The high euro won’t be an issue “so much for Greece because most of our exports are within the euro zone,” Stournaras said. “But yes, overall there’s a problem with the level of the euro.”

Stournaras’s opinion contrasts with that of Luxembourg Finance Minister Luc Frieden, who said Feb. 5 that the euro’s level doesn’t concern him at present and its strength follows the economic reality of the euro zone. The two are due to meet at a gathering of euro-area finance ministers in Brussels on Feb. 11.

‘Assert Inerests’

German Chancellor Angela Merkel’s government yesterday dismissed calls by French President Francois Hollande to steer the euro’s exchange rate, saying currencies should be determined by the market and not managed.

“Exchange-rate policy isn’t an appropriate instrument to boost competitiveness; it relies on short-term stimulus through targeted depreciation,” German government spokesman Steffen Seibert told journalists in Berlin. “Sustained competitiveness can’t be achieved in this way.”

Euro leaders can’t allow the single currency to fluctuate “according to the mood of the market,” Hollande said on Feb. 5. “We have to act at the international level to assert our interests.”

Other political figures have also been warning about the euro’s ascent. Luxembourg Prime Minister Jean-Claude Juncker called the exchange rate “dangerously high” on Jan. 15 and Belgian Finance Minister Steven Vanackere on Jan. 28 said “the risk is real” of a “currency war” with Japan.

To contact the reporters on this story: Maria Petrakis in Athens at mpetrakis@bloomberg.net; Christos Ziotis in Athens at cziotis@bloomberg.net

To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net


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