*NEWS*EUROZONE TO TARGET YUAN REFORM

[Anonymous]

Eurozone heads target yuan reform
Eurozone ministers have called for China to reform its currency, saying it is too low in value.
The ministers were gathering in Luxembourg ahead of a key meeting of the G7 nations later in October.While the US has long been a critic of China’s currency policy because it says a weak yuan harms exports of US goods, Europe has not been as vocal.The eurozone group said emerging countries – “especially China” – needed to change their exchange rates.

‘Necessary adjustments’
Analysts had seen the Luxembourg meeting as a test of how much the ministers could reach a consensus in advance of the G7 talks.”In emerging countries with large and growing current account surpluses, especially China, it is desirable that their effective exchange rates move so that necessary adjustments occur,” the ministers said.In laying out the priority of topics under discussion, Luxembourg Prime Minister Jean-Claude Junker, who chaired the meeting, said: “First point China, second point dollar, third point Yen.”Later on Jean-Claude Trichet, President of the European Central Bank (ECB), confirmed that he and Monetary Affairs Commissioner Joaquin Almunia would travel to China in the coming months to talk directly to the Chinese government about the yuan.”We will engage in dialogue with the Chinese authorities to discuss macroeconomic policies, ” said Mr Trichet, speaking to the European Parliament.Earlier this year, a US Senate committee supported plans to give its government new powers to counteract the impact of the low yuan, to better protect trade and workers.The G7 meeting, which will include the US, Japan, Canada, Britain as well as eurozone nations France, Germany and Italy is scheduled for 19 October. 

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October 9, 2007 at 10:54 AM