Eurozone finance ministers cheer strong euro, want more
BRUSSELS – Eurozone finance leaders cheered on their rallying currency yesterday after issuing a rare joint statement that read like an open invitation for foreign exchange markets to launch an assault on dollar parity. Despite tensions over budget slippage, they united around their strongest declarations on the euro since its 1999 launch: «Ministers, the vice president of the ECB (European Central Bank) and the Commissioner welcomed the strengthening of the euro,» they said after a late night meeting of the euro group on Thursday, adding: «They shared the view that a strong euro is in the interest of the euro area» – stout encouragement to push the euro beyond the 28-month highs just short of dollar parity it has scaled in recent weeks. There was more cheerleading yesterday before the start of a regular monthly meeting with non-euro members Britain, Denmark and Sweden. French Finance Minister Francis Mer told Les Echos that it was «good news» that the value of the euro on foreign exchange markets was almost one to one with the dollar. Their meeting will focus on complaints that some of the European Union’s biggest members are trying to fudge the Stability and Growth Pact, which underpins monetary union, and tackle issues to make the region a better place to do business. They tried to paper over their differences on EU budget rules by confirming public spending would be kept under control to safeguard the region’s economic prospects and wipe out deficits by 2004 at the latest. «Ministers noted that the Stability and Growth Pact provides a solid framework for the conduct of sound budgetary policies in the euro area conducive to low interest rates, high investment, growth and employment,» Thursday’s statement said. Four of the EU’s 15 member states, including heavyweights France, Germany and Italy, are in trouble with the Commission for not doing more to get their budgets close to balance or into surplus by a commonly agreed deadline of 2003 or 2004. The European Commission has the job of policing public budgets and is anxious to reassert its authority. The fourth is Portugal but it is also in hot water for a recent admission that its deficit may have swollen to 3.9 percent last year, clearly breaching the pact’s 3 percent ceiling, and potentially costing Lisbon a hefty fine. To make the point that the pact’s rules must not be bent, the Commission may decide to implement the «excessive deficit procedure,» which is the first step toward imposing fines.
