By Anna McLauchlin - 19th January 2004
Euro ministers on Monday night tempered their insistence on a 'strong' euro, stressing the need instead for stability in the exchange markets.
And while finance chiefs shied away from signalling action to curb the rise of the single currency, they admitted they were "concerned about excessive exchange rate moves."
Irish finance minister and Ecofin council president Charlie McCreevy issued a statement following the first meeting of euro finance chiefs in 2004.
"Concerning exchange rates," it states, "our long term strategy does not change: the euro must keep its value over the medium and long run, in line with economic fundamentals.
"In the present circumstances, we particularly stress stability and we are concerned about excessive exchange rate moves."
Clearly aware of the sensitivity of any remarks on the currency markets, McCreevy would not be drawn on whether ministers would ask G7 leaders meeting on February 6 to slow the euro's rise.
But he admitted the issue was touched on during the debate.
The euro rose to $1.29 on January 12, but fell slightly towards the end of the week after the European Central Bank expressed concern at the speed with which the euro had climbed.
On the stability pact, McCreevy admitted there was little support from member states for the European Commission's decision to take the council of ministers to the European Court of Justice (ECJ) for suspending the pact in November.
EU governments decided to retreat from imposing the stability pact which could have led to sanctions against Paris and Berlin for breaching EU deficit rules, a situation which the commission claims is illegal.
"Although the majority of member states would have preferred that the case didn't go to court, all fully respect its decision to do just that," he told journalists.
Spain and Netherlands have expressed support for the court action, but council sources on Monday said the official position was that the commission 'is on its own'.
In the court the commission will be facing the council of ministers as a whole, not the individual member states.
But this does not prevent governments from intervening in favour of either party during the case.
The commission also came under attack for changing the stability pact before the ECJ had made a judgement on the November decision.
It will propose an overhaul of the pact in a commission communication next month, which is likely to include linking economic developments to budget deficit thresholds.
"Ministers are of the view that a little more time might have been useful before taking action on the pact", McCreevy admitted.
But economic commissioner Pedro Solbes insisted "We are ready to work on our experience (with the pact) of the last four years."
During the three to six month wait for the court ruling, both McCreevy and Solbes both stressed it would be "business as usual".
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