The political furor surrounding the soaring Euro is reaching
fever pitch, as European politicians clash with central bankers over the role
of the state in determining exchange rates. Jean-Claude Trichet, President of the European Central bank (“ECB”) has
argued that the Euro should be valued strictly by the markets. Politicians from EU-member states, on the
other hand, have frequently argued that the surging Euro is hampering economic
growth and should be used as a tool in economic policy-making. The newly-elected president of France,
Nicolas Sarkozy, has been a vocal critic of the ECB, arguing that the Euro
should actively be held down. The
Financial Times reports:
In contrast to the
US and Japan, where the finance ministry sets the exchange rate regime and
intervenes in exchange markets, eurozone central banks hold and manage foreign
exchange reserves and have responsibility for any market intervention.
Read More: ECB takes aim at Sarkozy over euro
Original post by Jimmy Atkinson and software by Elliott Back
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