Jouyet: European Economy Slow Due to Weak Dollar

France’s European Affairs Minister
Jean-Pierre Jouyet said today in St. Julians, Malta, at the press-conference devoted to the euro’s introduction to Malta, that the European economy can’t cope with the current exchange rates of the European currency against its major foreign counterparts — yuan, yen and dollar.

He also stated that other finance ministers from European regions agree on this problem and its possible solutions will be discussed on the next Group of Seven meeting, which will be held in February:

We cannot live with a euro at this level with three other currencies which are weak. The real problem for growth is the imbalances between the different currencies.

The euro gained almost 15% against the U.S. dollar in 2007, increasing the base value of the exported European goods and  damaging their competitiveness, while allowing exporters from U.S., Japan and especially China to dominate on the European markets.

And while the European officials increase pressure on China about their weak yuan, it may be so that the main cause of such currencies’ rates imbalance lies not in some other currencies, but in the euro itself. Only realizing this problem and unifying the efforts together the European nations can solve it to their economies benefit without creating extra problems in their foreign affairs.

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