Almunia:China moet zich houden aan toezeggingen (en)
EUOBSERVER / BRUSSELS - The European Union hopes China will act on earlier pledges and allow its currency to appreciate, the bloc's economy commissioner, Joaquin Almunia i, said on Monday (16 November).
Speaking at an event in Vienna, Mr Almunia told journalists that it would be "the best system for all of us" if China's currency and those of other developing countries were decided by the market and with less public intervention.
And amid mounting concern that a stubbornly strong euro - the currency shared by 16 EU member states - could dampening Europe's nascent economic recovery, Mr Almunia also re-iterated his support for a strong dollar.
European policymakers fear the region's exports are in danger of being undercut by more attractively priced foreign products from China and the US amongst others.
Since 2005, Chinese policymakers have allowed the yuan to gradually appreciate. But over the last year this rise has been halted due to the economic downturn, something Mr Almunia is confident China will now reassess as the crisis comes to an end.
"US treasury secretary Timothy Geithner clearly said that he wants a strong dollar, and from China there are signals that indicate a loosening of the yuan from the dollar," he told German business daily Handelsblatt in an interview published on Monday.
"The Chinese leadership knows and accepts that it has to rebalance its economy, and a certain appreciation of its currency is necessary for that," Mr Almunia explained.
ECB
Europe sees the currency debate as part of a global rebalancing act following the worst economic crisis since World War Two, with other components including the need to address US over-borrowing and China's trade surplus.
Mr Almunia intends to travel to China later this month to discuss the issue, together with European Central Bank President Jean-Claude Trichet and eurozone chairman Jean-Claude Juncker.
And with Germany the largest exporting nation within the EU and eurozone, there are increasing signs that the country will try to fill the ECB post with its own candidate once Mr Trichet retires in two years' time.
Debate is currently raging within the EU as to who should take up the new posts created under the Lisbon Treaty. Leaders will meet for an extraordinary summit on the 19 November to decide the issue.
However, the apparent absence of German candidates for either the post of president of the European Council or the high representative for foreign affairs is adding to speculation that Germany will seek the ECB job.
"When this [current debate] has been settled, there will be a number of other positions to fill and Germany attaches a great deal of weight to playing a corresponding role," German deputy foreign minister, Werner Hoyer, said before a meeting of EU foreign ministers on Monday.
Bundesbank chief Axel Weber is a likely German candidate.
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