Euro "too strong", says European Commission's Tajani

©Reuters/Kai Pfaffenbach

European Commission Vice President Antonio Tajani said Wednesday the euro was overvalued and urged the zone's central bank to help exporters by weakening the single currency, AFP reports. Speaking in Hanoi he said that "today, the euro for our exports... it is too strong," and called on the European Central Bank to follow the US Federal Reserve's lead in managing the dollar. Tajani, who is leading an EU mission, said his was a personal view and he was not speaking on behalf of the Commission, the EU's executive body. He also urged the ECB to help boost output in the eurozone, where the strong euro weighs on exports and undercuts the region's still very fragile economic recovery. "If you want to utilise (the) euro for our economy it is important to have -- in the next year -- an ECB working not only in favour of stability but in favour of growth," he said. Tajani is in Vietnam to help EU companies operate in the ASEAN region, in the tourism, agri-business and manufacturing sectors, the EU said in a statement. He is being accompanied in Vietnam by 47 representatives from EU industry associations and companies and is due to meet Vietnam's Prime Minister Nguyen Tan Dung later Wednesday. ECB policymakers took markets by surprise last week by cutting interest rates to a record low of 0.25 percent. This followed data showing eurozone October inflation at a four-year low of 0.7 percent, raising the spectre of deflation that could lead to falling prices, and declining wages and output. ECB chief Mario Draghi rejected suggestions at the time that the euro's recent strength was a factor behind the rate cut.

European Commission Vice President Antonio Tajani said Wednesday the euro was overvalued and urged the zone's central bank to help exporters by weakening the single currency, AFP reports. Speaking in Hanoi he said that "today, the euro for our exports... it is too strong," and called on the European Central Bank to follow the US Federal Reserve's lead in managing the dollar. Tajani, who is leading an EU mission, said his was a personal view and he was not speaking on behalf of the Commission, the EU's executive body. He also urged the ECB to help boost output in the eurozone, where the strong euro weighs on exports and undercuts the region's still very fragile economic recovery. "If you want to utilise (the) euro for our economy it is important to have -- in the next year -- an ECB working not only in favour of stability but in favour of growth," he said. Tajani is in Vietnam to help EU companies operate in the ASEAN region, in the tourism, agri-business and manufacturing sectors, the EU said in a statement. He is being accompanied in Vietnam by 47 representatives from EU industry associations and companies and is due to meet Vietnam's Prime Minister Nguyen Tan Dung later Wednesday. ECB policymakers took markets by surprise last week by cutting interest rates to a record low of 0.25 percent. This followed data showing eurozone October inflation at a four-year low of 0.7 percent, raising the spectre of deflation that could lead to falling prices, and declining wages and output. ECB chief Mario Draghi rejected suggestions at the time that the euro's recent strength was a factor behind the rate cut.

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