There is no need to intervene against the strong euro, the Chairman of finance ministers of the eurozone Jean-Claude Juncker said on Friday, snubbing French calls for a weaker single currency to help exports.
France has long complained against the strength of the euro, which hit record highs against the dollar and the Japanese yen last month, saying it was hurting its exports.
The euro has lost some steam since mid-July peaks but remains strong because investors are attracted to higher European Central Bank interest rates compared with the prospect of flat or falling rates in the United States.
Interest rates in Japan are only a fraction of those in the euro area. Juncker told Reuters that while the eurozone could intervene if it wanted, there was currently no need.
"We are not in that situation," he said. "As we are living in a system of floating currencies, we know what to do when the time has come to act, but there is no reason for becoming nervous, everything is under control," he said
He said that were an intervention to be attempted through an agreement by ECB and eurozone finance ministers, such a move would not be pre-announced.
"I don't think it would be reasonable to indicate targets to the markets. If a situation would appear where both the bank and the ministers would feel that something should be undertaken, this will be done without any pre-announcement, without any ...indications," he said.
Juncker, who is also Luxembourg prime minister, said the euro's strength so far has not harmed economic growth in the 13 countries using it. "As far as we can see the euro's strength did not harm the economic growth performance of the euro area," he said.
The Eurogroup comprises eurozone finance ministers, the head of the European Central Bank and the EU commissioner for economic and monetary affairs. It provides the key forum for eurozone politicians to discuss policies with the ECB.
France has been pushing for a closer dialogue between the ECB and euro zone governments, to better control the euro's exchange rate, which Paris blames on rising ECB interest rates.
French minister for Europe Jean-Pierre Jouyet has said the current dialogue was sometimes "a little formal and simplistic". Juncker said he had explained several times to both Jouyet and to French President Nicolas Sarkozy that within the Eurogroup there was an exchange of views on both monetary and exchange rate polices, without infringing on ECB independence.
He said eurozone finance ministers discussed the strong euro with the ECB at their monthly meetings in a "very open and frank way", but that the result of these talks was not shared with the public.
"It would be easier for the president of the Eurogroup to become more outspoken in order to show how clever we are, how involved we are in all these discussions, but I don't think that this would be responsible," he said.
"I have a clear understanding with the President of the central bank (Jean-Claude Trichet) that these issues have to be discussed...but we are not providing the public with more detailed information, it would be crazy, in fact, to go public with all this," he said.
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