More reason to freedom in the negotiation85 over the last twelve months as the whole sector5 billion in capital for 18 of the capitalIn ten years the evolution is spectacularRemains to know how the markets will reactHowever the penetration rate is currently 7Alone this area represents 1 million of the 1On the bottom most have not upset the deal We did make not promotion indicates and BNP ParibasWe tried a Chinese peppersnoodles VariantHere is a debate, to statements of Angela Merkel in December, threatening to become a bone of contention between the France and the Germany. On the one hand, a President made by a German critique too bright of the European Central Bank. On the other, a German Government which confirmed with superb that a strong euro was his preference and that it was entirely consistent with the performance of its exports. The problem is that close to 1.50 dollar, overvalued euro more of 10, becomes actually penalizing for the French economy. The evidence is that the France 2007 trade deficit will approach 40 billion euros. In the event of further depreciation of the greenback, the exchange rate would become for her less and less bearable.
In fact, addressing thus the problem could lead to an impasse. A currency, to be shared, cannot be managed without that each of the two "major" European manifest a minimal empathy with his partner. While German side, are reminded that the countries fits for a strong euro, because the know-how of its traditional leading-edge sectors (machine tool, automotive, chemistry, etc.) and wage moderation have this protected its competitiveness. Its leaders were wrong to insist on the fact that half of the two countries trade in euros, or that the strong euro dampens usefully the rise in the price of oil.
However, French, side is invoked as legitimate that the overvalued euro implies that French exporters grow to its limits support the increase in the Exchange outside the euro area and it absorb more difficult on their profit margins. A long, such behaviour is to reduce drastically their profitability and therefore to curb investment. Similarly relies on to Paris the fact that Europe, with a euro appreciating while Asian currencies remain "stuck" to the dollar exacerbates the monetary dumping of low-wage countries. Finally, the last element of the advocacy French to justify the need for a monetary empathy is the boost to competitiveness obtained by the Germany that brought in 2007 its 16 to 19 VAT rate. It thus transferred a part of the work on the consumption tax. And as both tax the imported products and local production, she obtained a slight advantage of competitiveness to products from the rest of the world (and especially French, the Germany being the first customer of the France).
German, on a beautiful game to return the France to recurring weaknesses (budgetary drift, debt, propensity to strike, etc.) and focus on its responsibilities. The argument is weight. However, should not lose sight in Berlin that the recent advantage due to the wage moderation may well disappear with the increasing willingness of German unions to better take advantage of the fruits of growth. Similarly, it is clear that the Germany is not that of "price-makers" like Porsche or Siemens. With the euro above 1.40 dollar, SMEs toil already export.
Therefore, the misunderstanding on the euro must be quickly lifted. To achieve this, the two countries must be well aware of the fact that they have to do. For Airbus, the flagship European where they have common interests, shows: a decrease of 10 of the dollar against the euro, it is 1 billion of losses to ensure transit. If we want to avoid that path reverse policies of the ECB interest rate and reserve Federal American continue, needed the support of the German vote. Currently, he is lacking: the sacrosanct rule of independence of the Central Bank is still perennial here. Remains that any new increase in the rate of refinancing of the ECB to counteract the inflationary threat would, in the immediate future, inappropriate. It would still increase the differential with the United States and could push Asian countries to accelerate their movement of diversification of foreign exchange reserves by buying the euro strong Exchange and highest performance. Such a movement could quickly become uncontrollable.
In total, the Franco-German and beyond European front must also recover so that the global problem of misalignments of exchange rates is finally asked. This should be sooner or later consider together the first International Monetary Conference of the 21st century as the parity of the euro is inseparable from that of the US dollar with the renminbi and the yen. No doubt will it not easy to convince all the actors but they will be each and others, sensitive to a shock argument: is reached to progressively realign the exchange rate, either it will not avoid trade protectionism. That this is a beautiful challenge for the G8 and, at the level of preparedness for the Monetary Fund and its new Director.
