The currency war is a reality that the European Central Bank should understand, as stated by the Industry Minister of France, Arnaud Montebourg. According to Montebourg, it is important to address the current economic stagnation in this region and for bettering that, Euro needs to be devalued.
The currency which is shared across 17 European currencies needs some devaluation, as commented by Montebourg and he asked the European Central Bank to do its job. This step if taken, according to Montebourg, will mark an activist and political management of the shared currency.
Montebourg added that Euro is currently too strong and it, by no means, corresponds to the economic fundamentals. He commented that weakening the currency has become a political tool these days and it’s the European Central Bank’s time to confront the same. Incidentally, only this month, the Central Bankers and Finance Ministers of the G-20 nations sat and pledged not to indulge into any sort of manipulation in the currency exchange rates. Japan has been continuously blamed over the last few months for manipulating Yen’s value, however, in the G-20 meeting; the Asian powerhouse was not singled out.
Euro had gone down to $1.3018 marking its weakest value since 7th January, at one point of time today. The main reason behind today’s decline was the inconclusive Italian elections that spread the fear of deepening the debt crisis in Europe. However, at a later time, the currency recovered a bit and is now at $1.3080. While pointing to Euro’s latest decline, Montebourg said that he is very happy with the same and things should continue this way only.
Incidentally, Montebourg has courted controversy several times in recent days. Last November, he threatened to nationalize ArcelorMittal steel plant so that its shuttering can be blocked. He even worked hard to save other factories such as Petit-Couronne refinery from closing down. He also had a verbal spat with the Chairman of Titan International Inc., Maurice Taylor. Maurice backed out from taking over a French plant of Goodyear Tire & Rubber Co. citing reasons such as high wages and low work hours.
Montebourg believes that the Central Bank has not done enough to ease the region’s struggling economies’ debt burden. Montebourg, however, cited his comments as personal remarks and stated that these have nothing to do with the views of the French Government.