The euro remains a “currency for everyone”

A two-day meeting of European finance ministers ended yesterday in Luxembourg. After a series of critical remarks about the common European currency made in recent days by individual members of the Italian government (they discussed the possibility of returning to the lira), participants in the Luxembourg meeting pointedly put their shoulders to the euro, which is losing its weight after the refusal of France and Holland to support the EU constitution. A unifying slogan was even put forward: “The euro is a currency for everyone.” It was voiced by the Prime Minister and concurrently the head of the Luxembourg Ministry of Finance, Jean-Claude Juncker, who chaired the circle of the main financiers of the EU countries (he is now the chairman of the EU Council). “It is impossible to imagine that any country will leave the euro space,” said Mr. Juncker and put an end to this debate. “Ministers don’t discuss such nonsense.” The head of the European Central Bank, Jean-Claude Trichet, spoke similarly yesterday: “All those who express absurd ideas have received a harsh rebuke from the governments concerned. I don't comment on stupid things."

Discussion about the possible return of EU countries to liras, marks, francs, etc. was born through the efforts of two Italian ministers belonging to the Liga Nord party, known for its skeptical position regarding the idea of ​​European integration in general and the single currency of the EU countries in particular. They proposed in Italy, without abandoning the euro, to return to the lira as a parallel means of monetary settlements. Reformer minister Roberto Calderoli developed this idea by proposing to “peg” the new lira to the dollar.

All this, in the opinion of the Luxembourg prime minister, is unworthy of serious attention. The International Monetary Fund, he noted, made a very positive forecast for economic growth for the eurozone in the second half of the year. At the same time, the IMF made it clear that it views monetary policy issues from a slightly different angle than the European Central Bank does. IMF European Director Michael Deppler took part in the ministerial meeting in Luxembourg. According to the IMF, the euro exchange rate at the level of 1.2-1.3 dollars is “approximately correct.” The latest IMF report, according to Mr Deppler, suggests that a rate cut by the ECB will soon be “appropriate” if economic growth in the eurozone does not accelerate in the third quarter.

So far, the ECB has managed to successfully resist political pressure and consistently keep the rate at 2%. However, yesterday Mr. Trichet hastened to reassure everyone - he denied all reports about a possible reduction. “There are some challenges and we will look at the facts and figures very carefully, we are pragmatic,” he told Reuters. “We will continue to closely monitor the statistics that come in, but I do not plan to reduce the rate.” And although the European economy, he said, will not see a sharp jump in growth rates, the region must continue reforms, and “the ECB will do everything to maintain and strengthen consumer and business confidence,” despite high oil prices and low levels of consumer and business confidence. "Reforms are the most important thing because we must stimulate the growth potential of our large economy of 307 million people, a potential that is too low and which can be significantly increased if we accelerate reforms," ​​Mr. Trichet said. “The situation is very conducive to growth and job creation because short-term rates are at zero and long-term rates have been at low levels for a long time.”

Yuri Shpakov, Berlin