Europeans call on reducing euro’s value
TEXT OF STORY
Stacey Vanek-Smith: The dollar is up a bit this morning. Still about a buck fifty to the euro. The greenback has lost a quarter of its value since 2002. For us, that means some seriously expensive gelato. For Europeans, a weak dollar means U.S. consumers buy less of their stuff. That’s why French President Nicolas Sarkozy is calling for a stop to the dollar’s slide. John Dimsdale has more.
John Dimsdale: Europeans complain the high-priced euro hurts their exports and they’re calling on the European Central Bank to put more euros in circulation to reduce their value.
Fred Bergsten at the Peterson Institute for International Economics calls the European concerns ridiculous.
FRED BERGSTEN: Europe is not uncompetitive at these exchange rates. They are not even running a trade deficit. The U.S. is still running a huge deficit by comparison and must have a somewhat weaker dollar to balance our international position. So I don’t have much sympathy.
Besides, Johns Hopkins economics professor Steve Hanke says those complaining politicians can’t do much other than keep complaining.
STEVE HANKE: Well, they can’t do anything about it because the European Central Bank is independent.
He says if the European Central Bank did try to make the euro cheaper by flooding the market with them or lowering interest rates, the result would be out-of-control inflation.
In Washington I’m John Dimsdale for Marketplace.
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