If a Trichet falls in the forest, does anyone hear?
Amid the clamor from European voices on the euro, as the currency becomes more politicized, the European Central Bank chief is keeping quiet.
That silence is unlikely to make a difference, though, given the squawking and squabbling among European politicians in the run-up to this month's Group of Seven industrialized nations meeting of finance ministers.
Sensing a chance to log political mileage, some (though it must be noted, not all) lawmakers from Europe, led by the French, are starting to get more overt in their complaints about the euro's strength, and pressing the European Central Bank to do something about it.
Trichet, quite rightly, is keeping mum. The euro is not an issue for the ECB. And where the euro is trading shouldn't really have a bearing on what the central bank does with rates, given its primary focus on inflation fighting.
Asked about the euro repeatedly at a press briefing last Thursday, Trichet refused to be drawn on how he viewed the current euro level, or what should be done about it.
Asked again Monday, he just said the G7 was the platform to communicate views on foreign exchange movements.
Trichet is not a person who is shy about coming forward, and he has vigorously defended the ECB in the past, but in this case he would realize there's nothing to be gained by answering the critics.
It's easy to score some political points at home by kicking the ECB.
The Europeans know that when it comes down to it, they can complain all they want, but when the G7 meets it is very unlikely there will be a concerted agreement among all those present on the need for a weaker euro.
The U.S. has remained implacable in the face of previous attempts, and the Japanese would not tolerate any sort of statement which suggested they were keeping the yen artificially or unnecessarily low - i.e. that the yen did not reflect fundamentals.
Expect a fair amount of rhetoric this week from European Union finance ministers, who are holding several days of talks where the euro will take top billing.
The "EcoFin" meetings will be a good chance for politicians to point the finger at the ECB for their currency woes.
A statement released a few hours ago by the group of finance ministers shows they are also targeting China for its undervalued yuan, with Beijing remaining a convenient scapegoat on the euro issue.
The statement was a perfunctory nod to the U.S. and Japan. It called for China to untether the yuan, while noting U.S. "authorities have reaffirmed a strong dollar is in the interest of the U.S. economy." It added Japan's economy is on a "sustainable recovery path," implying the yen should be stronger.
There is some truth to each of those claims, but in the end there is no single culprit for what is happening right now to the euro.
That shows again that the ECB couldn't - and shouldn't - step in. There would be little-to-no upside for the ECB and little-to-no downside for the euro, from any solo intervention.
Some aren't that convinced the euro - which has climbed 3% against the dollar since the start of September and touched a record high of 1.4283 earlier in October - is really starting to bite into European economic growth.
Sunday, ECB Executive Board Member Lorenzo Bini Smaghi told the Turin daily La Stampa the strong euro had benefits, like making energy imports cheaper for euro-zone countries. He also cautioned politicians against making the euro debate public, warning their comments can be misleading for markets.
And Dutch Finance Minister Wouter Bos said Monday that "I haven't seen any extreme volatility (in the euro) recently." "I have seen a gradual increase, and strong economies are going to adjust to that," he added.
Amid the clamor from European voices on the euro, as the currency becomes more politicized, the European Central Bank chief is keeping quiet.
That silence is unlikely to make a difference, though, given the squawking and squabbling among European politicians in the run-up to this month's Group of Seven industrialized nations meeting of finance ministers.
Sensing a chance to log political mileage, some (though it must be noted, not all) lawmakers from Europe, led by the French, are starting to get more overt in their complaints about the euro's strength, and pressing the European Central Bank to do something about it.
Trichet, quite rightly, is keeping mum. The euro is not an issue for the ECB. And where the euro is trading shouldn't really have a bearing on what the central bank does with rates, given its primary focus on inflation fighting.
Asked about the euro repeatedly at a press briefing last Thursday, Trichet refused to be drawn on how he viewed the current euro level, or what should be done about it.
Asked again Monday, he just said the G7 was the platform to communicate views on foreign exchange movements.
Trichet is not a person who is shy about coming forward, and he has vigorously defended the ECB in the past, but in this case he would realize there's nothing to be gained by answering the critics.
It's easy to score some political points at home by kicking the ECB.
The Europeans know that when it comes down to it, they can complain all they want, but when the G7 meets it is very unlikely there will be a concerted agreement among all those present on the need for a weaker euro.
The U.S. has remained implacable in the face of previous attempts, and the Japanese would not tolerate any sort of statement which suggested they were keeping the yen artificially or unnecessarily low - i.e. that the yen did not reflect fundamentals.
Expect a fair amount of rhetoric this week from European Union finance ministers, who are holding several days of talks where the euro will take top billing.
The "EcoFin" meetings will be a good chance for politicians to point the finger at the ECB for their currency woes.
A statement released a few hours ago by the group of finance ministers shows they are also targeting China for its undervalued yuan, with Beijing remaining a convenient scapegoat on the euro issue.
The statement was a perfunctory nod to the U.S. and Japan. It called for China to untether the yuan, while noting U.S. "authorities have reaffirmed a strong dollar is in the interest of the U.S. economy." It added Japan's economy is on a "sustainable recovery path," implying the yen should be stronger.
There is some truth to each of those claims, but in the end there is no single culprit for what is happening right now to the euro.
That shows again that the ECB couldn't - and shouldn't - step in. There would be little-to-no upside for the ECB and little-to-no downside for the euro, from any solo intervention.
Some aren't that convinced the euro - which has climbed 3% against the dollar since the start of September and touched a record high of 1.4283 earlier in October - is really starting to bite into European economic growth.
Sunday, ECB Executive Board Member Lorenzo Bini Smaghi told the Turin daily La Stampa the strong euro had benefits, like making energy imports cheaper for euro-zone countries. He also cautioned politicians against making the euro debate public, warning their comments can be misleading for markets.
And Dutch Finance Minister Wouter Bos said Monday that "I haven't seen any extreme volatility (in the euro) recently." "I have seen a gradual increase, and strong economies are going to adjust to that," he added.
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