EU’s Barroso says euro cushioning oil price impact
Europe has been shielded from the effects of rising oil prices to some extent by the strength of the euro, European Commission President Jose Manuel Barroso told a French newspaper in an interview released on Saturday.
“Today we buy a barrel of oil at €66, whereas if there were perfect parity, we would be paying more than €100,” Barroso told the weekly Journal du Dimanche. “Of course we’re concerned about this wide divergence in exchange rates, but at the same time we have to see that the so-called ‘strong’ euro -- or rather the weak dollar – has allowed us to cushion the impact of the rise in commodity prices,” he said. Barroso’s remarks, which echoed several of his recent comments on the euro, came after the European currency traded at about $1.53 and US oil prices hit a record high of more than $106 a barrel on Friday. He said he had full confidence in the European Central Bank and called for its independence to be respected, saying it would be a mistake for politicians to make comments on an appropriate level for the currency.
French politicians, including President Nicolas Sarkozy, have been among the most vocal critics of ECB policy and have repeatedly voiced concern about the strong euro and its impact on French exporters. Barroso said they should not ignore the role the euro has had in restraining inflation. “It’s one of the chief worries in France, but if we had a very strong devaluation of our currency, inflation would rise. Purchasing power, especially of those, who only have their salaries or pensions to live on, would be strongly affected. With a significantly weaker currency, we would have even more problems,” he said. (Reuters)
SUPPORT THE BUDAPEST BUSINESS JOURNAL
Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.