France questions ECB role on euro exchange rate

15.11.06 @ 09:31

  1. By Honor Mahony
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French prime minister Dominique de Villepin has said the European Central Bank should not be left alone to set exchange rates for the euro.

  • "All the great trading powers have a foreign exchange policy," says the French PM (Photo: European Commission)

"We cannot allow the ECB to act alone on rates," said Mr de Villepin, according to Reuters.

Speaking at a meeting with sub-contractors for plane maker Airbus in southern France, he went on to warn that "its current level hurts some of our exports" and that Europe needs a "monetary shield."

"Let us equip ourselves with a real exchange rate strategy which integrates the objectives of growth, protection of our industry and of course employment. It is a major subject which we should address at European level."

Saying that all great trading powers have a foreign exchange policy, he made the case for Europe more strongly defending its own interests "rather than remaining the only trading power in the world that doesn't have effective rues against the excesses of globalisation."

The prime minister's comments come as the ECB is set to raise interest rates once more this year in December, with France being just one of several member states who have urged ECB chief Jean-Claude Trichet not to keep raising the rates and hurt economic recovery.

The independence of Europe's central banks is also coming under fire outside the eurozone, with Poland expected to appoint a new, government-friendly central banker in January after fiscal disciplinarian Leszek Balcerowicz departs.

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