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Europe seeks to blame dollar for its sluggishness
EFL, from an article about the World Economic ForumIf the issue is the sluggishness of the European economy, the problem may be that not everyone is doing their best, analysts said after taking in the thousands of words spoken at the Davos meetings by policy makers, economists and others. As the forum drew to a close over the weekend, several euro-zone policy makers tried to distance themselves from responsibility for the regionâs doldrums. Growth has not recovered more strongly, they said, in part because the United States is letting the dollar weaken, making European exports less competitive globally. In effect, said the French finance minister, Francis Mer, Washington has been telling Europeans, "My currency is your problem." Mer added, "We need responsible behavior from everyone." During a discussion on the global economy, the German economy minister, Wolfgang Clement, seemed to suggest that euro-zone policy makers were powerless to take any steps that might result in the euroâs swinging lower against the dollar. "The currency problem is on the table," Clement said, "and the United States must solve it." Nope. good luck - hope you figure out how markets work, soon ..... Analysts agree that the Bush administration has been tacitly allowing the dollar to weaken, not by actively talking it down but by pursuing policies that have swelled the U.S. trade deficit and the governmentâs budget deficit. But many also expressed disappointment at what they saw as an abdication of responsibility by European officials, who they say are doing nothing about a problem that is hurting the regionâs economy. Instead of blaming Washington for sluggish growth, said Jacob Frenkel, chairman of Merrill Lynch International, euro-zone policy makers should "ask themselves why, even before the dollar fell, they were growing more slowly than the U.S. economy." The reasons, Frenkel said in an interview, are that the euro-zone economy remains far less flexible than Americaâs. Yup. Read the rest .... Posted by: rkb 2004-01-27 |
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