G7 to discuss exchange rates

Leading EU business lobbies have urged the European G7 members (France, Germany, Italy and the UK) to defend euro area interests as the group of seven industrialised nations meets today (19 October) to discuss currency concerns and stability of financial markets.

The G7 (Canada, France, Germany, Italy, Japan, the UK and the United States) finance ministers will meet in Washington on 19 October 2007 to discuss currency markets, exchange rates and monetary policy. Trade, reform of international financial institutions, development, energy and environment are also on the agenda.

Shortly before the meeting, the leaders of EU employers’ organisation BusinessEurope and the French, German and Italian business federations urged the European G7 members to defend the common European interest, saying that they expected “clear commitments” from the G7 meeting. 

The call follows concerns voiced earlier this month by BusinessEurope regarding the appreciation of the euro against the US dollar, Chinese yuan and Japanese yen. According to the voice of EU business, the euro exchange rate has attained its “pain threshold” for companies. 

On 18 October, the euro hit a new record of 1.4310 against the dollar, breaking the previous record of 1.4283 per dollar set on 1 October.  

While France has repeatedly stated its concern over the effects of a continuously appreciating euro on the eurozone’s external competitiveness, Germany, the Netherlands and Austria seem to be less troubled by the euro’s recent high flight.

However, in the last Eurogroup meeting on 8 October, eurozone finance ministers joined the US in its criticism of China for keeping the value of the yuan artificially low in order to boost exports. The EU ministers urged China to adjust the yuan’s exchange rate, which has triggered the euro’s appreciation. 

They also voiced concerns over the undervaluation of the US dollar and Japanese yen.

Read more with Euractiv

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