A late item in the the Financial Times (gated, but can be read with a free registration) saying that “pressure is mounting on the European Central Bank to take action against a persistently strong euro with a leading industrialist calling on Frankfurt to to tackle the “crazy” strength of the currency.”
- “Fabrice Brégier, chief executive of Airbus’s passenger jet business, said the ECB should intervene to push the value of the euro against the dollar down by 10 per cent from an “excessive” $1.35 to between $1.20 and $1.25
- Comments coincide with calls from the International Monetary Fund and politicians in some eurozone countries – France in particular – for the bank to consider a programme of quantitative easing to tackle low inflation, sluggish economic growth and the strong euro.”
The article notes that the ECB’s Benoît Coeuré, said in an interview that the stronger the euro, the more the ECB comes under pressure to ac:
- “A lot of the low level of inflation . . . is due to the strength of the euro so the stronger the euro the more we have to do monetary accommodation.”
- But, he rejects calls to target the exchange rate explicitly. “It is not possible to target it because exchange rates are set on global markets, so it wouldn’t be wise or possible for us to have it as a policy target.”
- And there was no pressing need for the ECB to embark on a round of QE. “I see the odds as being low,” he said. “I am very convinced that what we decided already will work and will prop up inflation.”
Article is here: ECB under pressure to tackle ‘crazy’ euro
