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EU chides ECB critics, urges responsibility (AFP)

Wed Dec 20, 2:47 PM ET

PARIS (AFP) - Using the euro or Europe in national political debates is "not very responsible and at times even dangerous," EU Economic and Monetary Affairs Commissioner Joaquin Almunia warned in an interview.

"The euro and Europe are sometimes used in national political debates to search for responsibilities beyond the borders of each member state," Almunia told the French daily La Croix in an interview to be published on Thursday but released in advance.

"I believe this exercise is not very responsible and at times even dangerous," he added.

Almunia's comments came in response to calls by several French politicians for greater influence by eurozone governments in decisions by the European Central Bank (ECB) that affect the euro's exchange rate.

"One must have the courage to explain the reality of problems and the real reasons why we cannot resolve them," Almunia argued after noting that in France, "the 'strong euro' is presented as the root of all evils."

Earlier this month, conservative French Prime Minister Dominique de Villepin and Segolene Royal, the Socialist party candidate for president, said European politicians should have a greater say in ECB decisions regarding the euro.

Royal's likely right-wing opponent, Interior Minister Nicolas Sarkozy, has also called for a re-assessment of ECB policies.

Outside France, many European leaders swiftly expressed support for the central bank's independence, however.

The cause of comment was the steady appreciation of the euro against the dollar, which was attributed in part to rising interest rates set by the ECB.

The ECB last raised its benchmark rate to 3.5 percent, taking short-term eurozone rates to their highest level in five years.

But a stronger euro also raises prices on eurozone exports, making them less competitive, and is thereby seen as threat to economic growth. At the same time, however, an appreciating euro lowers the cost of dollar-based imported commodities, notably oil, and can help curb inflation.

Almunia pointed out to readers of La Croix that France posts its biggest trade deficit "with other eurozone countries, in particular Germany which has the same currency," adding that the euro's present level against foreign currencies had not prevented some eurozone countries from obtaining "fantastic export results."

Almunia also noted: "If we look at the exchange rate of currencies integrated in the euro from 1980 until today, the euro is actually very close to its historic average.

"I think that through the euro, we are really criticising other subjects. When growth is weak we place responsibility on the single currency. Now that growth is back, no one is saying it is thanks to the euro."

Regions : Europe

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