Strong euro, high oilprices worry Schroeder

16th November 2004, Comments 0 comments

16 November 2004 , BERLIN - German Chancellor Gerhard Schroeder said on Tuesday he was worried over the impact of the strong euro and high oil prices on his country's exports. "Everybody is concerned with the euro-dollar exchange rate and the impact ... on exports - and not just exports," said Schroeder in a speech to business leaders in Berlin. The Chancellor added that high oil prices were also a concern. Schroeder vowed to continue his government's programme of economic reforms which he underlined "coul

16 November 2004

BERLIN - German Chancellor Gerhard Schroeder said on Tuesday he was worried over the impact of the strong euro and high oil prices on his country's exports.

"Everybody is concerned with the euro-dollar exchange rate and the impact ... on exports - and not just exports," said Schroeder in a speech to business leaders in Berlin.

The Chancellor added that high oil prices were also a concern.

Schroeder vowed to continue his government's programme of economic reforms which he underlined "could never be completed".

But the Chancellor defended Germany's post-war system which puts workers in half of the seats in corporate supervisory boards.

This was criticised by Dieter Hundt, president of the German Federation of Employers, who otherwise praised Schroeder for carrying out reforms in the face of opposition.

Hundt said the old supervisory board system had to be modernised because it saddled Germany with a competitive disadvantage in a globalised world.

Schroeder's remarks follow a joint response to the euro's record surge by eurozone finance chiefs in which they warned that "unwelcome" sharp movements in exchange rates could hurt economic growth in the 12-nation currency bloc.

The ministers meeting on Monday also urged eurozone governments to coordinate their response to higher oil prices.

Underlining their rising concern at the euro's strong performance on world foreign exchange markets, eurozone finance ministers tried simultaneously to talk down their currency while urging the United States to pursue a strong dollar policy at their meeting in Brussels.

"Volatile and disorderly movements of exchange rates are undesirable for economic growth," Dutch Finance Minister and current eurogroup chairman Gerrit Zalm told reporters.

"Recent sharp increases in exchange rates are unwelcome," Zalm said, adding that a US policy to promote a strong dollar would be "helpful".

But Zalm ruled out making any recommendations to the European Central Bank on the issue.

A statement by eurogroup ministers urged governments to coordinate their responses to higher oil prices and to steer clear of "distortionary policy interventions".

"Where short-term targeted measures are taken to alleviate the impact of higher oil prices on the poorer sections of the population, they should not compromise the overall policy framework," a eurogroup statement said.

DPA

Subject: German news

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