Brussels, 08/10/2007
In recent days, the ETUC is relieved to note that a debate about the impact of a brutal appreciation of the euro on economic growth has started up.
However, the ETUC wants to remind all involved that the management of the euro exchange rate is not the sole responsibility of the European Central Bank. Indeed, the European Treaty gives the ECOFIN council the power to define general orientations for exchange rate policies. [[Article 111: The Council, acting by a qualified majority either on a recommendation from the Commission and after consulting the ECB or on a recommendation from the ECB, may formulate general orientations for exchange rate policies in relation to one or more non-Community currencies. These general orientations shall be without prejudice to the primary objective of the ECB to maintain price stability.]]
The ETUC calls upon the ECOFIN council meeting on 8 and 9 October to discuss this line of action, as well as putting the issue of the euro exchange rate to the G7 meeting at the end of October.
Says ETUC Deputy General Secretary Reiner Hoffmann: “It is too easy for policy-makers to say that a too expensive euro should be no problem if workers moderate wages. This approach would perhaps save European exports but it will certainly kill domestic demand and abort the recovery. Instead, the Commission and the ECOFIN Council need to act to provide the ECB with a clear framework of exchange rate policies.”