The German government has moved quickly to shoot down a plea by French President François Hollande for the EU to agree measures to control the euro's exchange rate.
Government spokesman Steffen Seibert said that Angela Merkel's administration would not support a move away from the euro's floating exchange rate. "We are convinced that exchange rates reflect the economic fundamentals, especially flexible ones. We are open to a discussion with France about it, but the German government doesn't think that an exchange rate policy is an appropriate instrument to boost competitiveness. It may set some short-term impulses, but nothing sustainable", he said.
NG Financial Markets economist Carsten Brzeski dismissed the remarks as an attempt by Paris to pile pressure on the ECB. "Part of every French president's brief is to attack ECB independence", he said, adding that "the treaties are very clear that Member States can't interfere with the ECB's mandate. This implicitly puts pressure to ECB to do something, either through quantitative easing or by cutting interest rates. But they're not going to do it."
Critics have also suggested that Hollande's statements were an attempt to deflect attention from the country's economic struggles.
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