Wednesday, February 6, 2013

A voice of reason in a sea of monetary insanity

From today's Open Europe news summary:

Hollande: Eurozone should have foreign exchange rate policy;
German Economy Minister: Objective is more competitiveness, not weaker currency
French President François Hollande told MEPs yesterday, “A monetary area should have an exchange rate policy. Otherwise, it has an exchange rate imposed on it that does not correspond to the real state of its economy…This is not about externally setting a target for the ECB, which is independent, but about engaging the essential reform of the international monetary system.” German Economy Minister Philipp Rösler commented, “The objective must be to improve competitiveness and not to weaken the currency.” Reuters reports that Slovakian Prime Minister Robert Fico voiced support for Hollande’s proposal.
Finally, there emerges an objection to the worldwide monetary insanity whereby every central bank tries to drive down the foreign exchange rate of its currency in the fallacious theory that doing so will revive an economy by stimulating exports.

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