Merkel to let Market set EUR Rate

In deep contrast with other world leaders. German Chancellor Angela Merkel is not calling for her currency’s devaluation.

German Chancellor Angela Merkel’s government dismissed calls by French President Francois Hollande to steer the euro’s exchange rate, saying currencies should be determined by the market and not managed.
As Merkel travels to Paris today to meet with Hollande on the eve of European Union budget talks, German government spokesman Steffen Seibert didn’t rule out a discussion over the French president’s warning about a rising euro. Hollande said yesterday that euro leaders can’t allow the single currency to fluctuate “according to the mood of the market.”
“Exchange-rate policy isn’t an appropriate instrument to boost competitiveness; it relies on short-term stimulus through targeted depreciation,” Seibert told journalists in Berlin. “Sustained competitiveness can’t be achieved in this way.”

via Bloomberg

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