From today’s Open Europe news summary:
New French PM calls for greater ECB action and criticises strong euro
French Prime Minister Manuel Valls yesterday won a vote of confidence in the lower house of the French parliament by 306 to 239. In his keynote speech, Valls stressed that the exchange rate of the euro is “too high”, and that “the ECB carries out a less expansionary monetary policy than its American, English and Japanese counterparts”. He also announced €50bn of budget savings between 2015 and 2017, and a series of tax cuts aimed at reducing labour costs by €30bn by 2016.
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Monsieur Valls expresses his belief in the greatest economic myth in the world today–that debasing one’s own currency is the path to economic recovery and prosperity. I cannot say this often enough–no nation can force another, against its will, to pay for its economic recovery. Debasing one’s own currency leads to an external transfer of wealth to one’s trading partners and to an internal redistribution of wealth from the non-exporting sector of the economy to the exporting sector of the economy. Patrick Barron
