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Weak
euro best thing for Europe's economy, analysts say |
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April 16, 2000
SINGAPORE, APR 15 (AP) - The weakness of the new common European currency has helped Europe rather than hurt it, analysts and officials said Saturday at international conference in Singapore.
"The behavior of the euro in its first year of existence could not have been better," said Antonio Borges, dean of France's INSEAD business school.
The euro lost roughly 17 percent of its worth against the U.S. dollar after its launch at dlrs 1.16 on Jan. 1, 1999, hitting a low of 93.90 cents in late February. It has since stabilized in a range of 95 cents to 97 cents.
Speaking to the Associated Press on the sidelines of the Europe Asia Forum, Borges said the euro's relatively low value has made European exports more competitive and spurred economic growth, Borges emphasized.
The strength of the U.S. dollar has, until recently, also helped keep the booming U.S. economy from overheating and prevented inflation in the United States - which could have put the world economy in a "more unstable mode," he said.
Earlier this year, the euro's foundering drew international skepticism about the new currency. In February, a headline in Britain's tabloid The Sun read "Euro Dead," next to an unflattering photo of European Central Bank President Wim Duisenberg gritting his teeth.
But others at the Europe-Asia forum agreed with Borges that the low valuation of the euro has been good for Europe.
"It (the low euro) means that Europe has hugely more important export possibilities," said Wolfgang Ischinger, state secretary of Germany's Foreign Ministry. "That's a stimulus for the economy. That's what we need."
"We have the best macroeconomic growth outlook that the European Union has had in decades. We attribute that in part to the euro," Ischinger told the AP.
He added that the euro is creating new opportunities for both large and small companies.
"There's no currency differential anymore. Money can float freely throughout these 11 countries," he said. |