PARIS (Reuters) - Economy Minister Arnaud Montebourg stepped up France’s push for a weaker euro on Wednesday, saying political leaders had the right to assess the right level for the currency in a position completely at odds with Germany’s.
French politicians and businesses have become increasingly vocal about calling for steps to curb the growing strength of the euro, with complaints growing as first-quarter corporate earnings are often dragged down by exchange rates.
“The whole issue of exchange rate policy is one for political authorities, according to the EU treaties, and notably for the Eurogroup,” Montebourg told French parliament, referring to the grouping of euro zone finance ministers.
The comments came two days after German Chancellor Angela Merkel’s spokesman said “the euro rate is not an issue for national politicians”, adding it was the responsibility of the independent European Central Bank.
The ECB Governing Council meets in Brussels on Thursday. The euro rate is one factor the bank’s president, Mario Draghi, has identified as a potential trigger for action.
Citing a French Finance Ministry report, Montebourg said a 10-percent drop in the euro would boost French Gross Domestic Product by 0.6 percentage points over a year and twice as much over three years
“That would mean an extra 150,000 jobs over three years and a lot of success on growth, deficits and rebalancing public finances,” he told lawmakers.
The euro, trading at 1.391 to the dollar at 1545 GMT,
has gained more than 14 percent over the U.S. dollar since a July 2012 low.
While Montebourg and Prime Minister Manuel Valls are openly criticizing the strength of the euro, Germany’s mass-selling Bild Zeitung wrote on Monday that the Bundesbank was concerned about French politicians’ comments on the euro.
Montebourg, one of the most leftist members of President Francois Hollande’s Socialist government and a frequent critic of the ECB, insisted he was not alone in his criticism and said the CEOs of top companies such as Airbus, Schneider, Lafarge, had all complained about the euro-dollar exchange rate.
Electricity and energy group Schneider (SCHN.PA) said in its first-quarter results last month that the depreciation against the euro of several key currencies including the U.S. dollar had cut 5.2 percentage points, or 268 million euros, off sales growth in the quarter.
The company said on Tuesday that it would unveil a plan next month to restructure several industrial sites in France to offset the impact of a strong euro, a move some unionists fear could mean plant closures and up to 200 job cuts.
On Wednesday, Vallourec, the French maker of pipes and tubes for the oil and gas industry, said the strong euro would mean a step up in its cost saving programme.
“The euro versus dollar is very high, too high,” said finance director Olivier Mallet, predicting that the impact “will be more and more negative when we move into Q2, Q3 and Q4.” Vallourec employs 9,000 of its 24,000 global workforce in France and Germany.
Other companies including drugmaker Sanofi (SASY.PA), the world’s largest cement maker Lafarge LAFP.PA and advertising agency Publicis (PUBP.PA) have seen their results affected by the strength of the euro.
Valls said on Saturday the euro was too strong and that President Francois Hollande would take initiatives to boost growth and employment after the May 22-25 European elections.
Additional reporting by Benjamin Mallet; Editing by Mark John and John Irish