Eurozone troika ready to act on world stage
MARK BEUNDERMAN
04.12.2007 @ 09:28 CET
The eurozone - the EU's common currency area - is ready to defend its interests abroad through talks with foreign leaders at the highest political level, the eurozone's chief has said.
Jean-Claude Juncker, Luxembourg's leader and finance minister who chairs meetings of eurozone states, told Financial Times Deutschland that last week's top-level EU mission to China could serve as an example for how the euro area could "jointly" stand up for its interests.
The EU is set to be become more vocal on economic issues on the world stage (Photo: EUobserver.com)
Mr Juncker travelled to China together with European Central Bank (ECB) chief Jean-Claude Trichet and EU monetary affairs commissioner Joaquin Almunia for talks with Chinese officials – including prime minister Wen Jiabao – to discuss currency imbalances and resulting trade problems.
Describing the China trip as a precedent, Mr Juncker said "If there are reasons which make it necessary to act jointly, we will repeat this".
"If the need arises we should promote our arguments," he stated. "One does not always need to do this immediately at the highest political level however," he added.
The comments raise the prospect of the top eurozone trio – the eurozone chair, the central bank chief and the monetary commissioner – operating more often as the EU's political "troika" on economic issues on the world stage.
The euro is not only seen as playing an increasingly important role in the global financial system – but the recent strength of the currency is directly affecting European companies.
Mr Juncker, Mr Trichet and Mr Almunia told the Chinese leadership last week that the ongoing depreciation of the Chinese currency, the remnibi, against the euro is hitting EU exports and damaging EU competitiveness.
"This is creating a lot of problems for the European economy and as a result protectionist reactions could occur," Mr Juncker said after the Beijing talks.
At the meeting, the EU and China agreed to set up a central banks working group to tackle currency questions.
Since 2005, the renminbi has fallen by almost 10 per cent against the euro while it has risen by more than 10 per cent against the US dollar - a development seen as a key factor in Europe's ballooning trade deficit with China.
"It is difficult to understand, whereas China is exporting less to the US than to Europe, why the yuan is appreciating vis-à-vis the dollar and why the yuan is depreciating against the euro," Mr Juncker said.
"We do think we have to correct this obvious imbalance," he added.