Frankrijk en Duitsland roepen ECB op tot renteverlaging vanwege sterke euro (en)

France and Germany are waging a joint attack on the value of the euro, which they see as too high, especially against the dollar.

French prime minister Jean-Pierre Raffarin yesterday called on the European Central Bank (ECB) to lower interest rates - which would weaken the euro - echoing a similar call two days ago by German Chancellor Gerhard Schröder.

Mr Raffarin said, "I share Chancellor Schröder's view on the reduction of interest rates. The euro-dollar exchange rate and the acceleration, extent and brutality of its movement isn't a good situation for the US or for Europe", he said, according to the International Herald Tribune.

"Exchange rates do not affect economic reality at the moment", he added.

His comments will increase the pressure on the ECB to intervene to weaken the euro against the dollar. The single currency is currently trading at around $1.24, well off its peaks but still high.

The ECB is completely independent of the member states but will heed calls from the two strongest economies in the 12 country euro zone. ECB president Jean-Claude Trichet will also take note of an ECB study published today which is expected to show that inflation is below the two percent target level.

This would give the bank scope to cut rates.

German pressure on Bush

One of the main reasons for the euro's strength is dollar weakness which many believe is a deliberate ploy by the American government to boost exports and help manufacturing in an election year.

Mr Schröder is expected to raise this issue with George Bush on his official visit today. The German Chancellor has been allotted about 30 minutes with the US President, during which time, they are expected to discuss - on top of the euro rate - Afghanistan, Iraq, the Middle East, Turkey, Cyprus, bi-lateral economic relations and preparations for the forthcoming G8 and NATO summits.