PARIS, July 2 Prime Minister Manuel Valls
renewed French calls for the European Central Bank to help bring
down an "overvalued" euro, telling Les Echos daily in an
interview he wanted a central bank that would purchase assets on
Francois Hollande's government repeatedly complained about
the strength of the euro ahead of EU parliamentary elections in
May, calling both the ECB and governments to take action on the
currency front to boost growth.
"The euro is overvalued, which is bad for our industry and
for growth," Valls told Les Echos in an interview published on
He welcomed the Frankfurt-based central bank's decision in
June to announce a raft of measures to counter the threat of
deflation, including cutting the deposit rate below zero and
offering more long-term loans aimed at boosting bank lending to
"It's a strong signal but my idea of a central bank is one
that could go further, including by buying assets on the
markets," he said. "Monetary policy cannot go only through
interest rate moves."
France has a tradition of asking for EU and ECB action to
weaken the euro, irking some of its partners and in particular
Germany, which in May rebuffed previous calls by Valls for a
"more appropriate" monetary policy.
ECB chief Mario Draghi has said large-scale asset purchases
are part of the bank's toolkit, but that for now the bank would
focus on its latest set of stimulus measures which will take
until late this year to assess for impact.
While governing Council member Ewald Nowotny in mid-June
described talk of quantitative easing as "phantom discussions",
a Reuters poll of economists pointed to a one-in-three chance of
the ECB launching an asset purchase programme within 12 months.
Economists polled by Reuters are unanimous in expecting no
further change in rates at Thursday's monthly ECB meeting.
(Reporting by Ingrid Melander; editing by Mark John)