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–The Euro...The New World Currency?
Asia-Europe Group Urged
to Use Euros, Cut Dollar Dependence
Bloomberg
Asian and European nations should cut dollar dependence and use more
euros in trade, according to an advisory group representing more than
three dozen countries, which comprise half of the global economy.
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``Europeans
have an interest in the euro being respected as a great and
important currency,'' |
The Asia-Europe Meeting, or ASEM, made the proposal during two days of
talks in the Vietnamese capital of Hanoi. A task force for economic
partnership, which met five times in the last two years, today announced
its recommendations for the group's 39 members, which include China,
Japan, France and Germany.
``Europeans have an interest in the euro being respected as a great and
important currency,'' German Chancellor Gerhard Schroeder told
journalists in Hanoi after the biennial leadership meeting ended. ``But
we don't want to see any competitive relationship.''
The dollar fell yesterday by the most since December 2002 against the
yen and tumbled versus the euro after hiring by U.S. employers
unexpectedly slowed in September.
Against Japan's currency, the dollar weakened to 109.43 yen in New York,
from 111.23 late the previous day, the steepest drop since Dec. 13,
2002, according to electronic currency-trading system EBS. The dollar
fell to $1.2419 per euro from $1.2285 yesterday, the biggest drop in
more than two weeks.
ASEM countries ``should take steps towards a more rational and efficient
use of Asian savings so as to reduce ASEM members' dependence on the
U.S. dollar,'' the task force recommended. Members should ``enhance the
international role of the euro and help create a more balanced
international monetary system.''
Central Banks
Jean-Claude Juncker, Luxembourg's Prime Minister and spokesman next year
for the euro currency, said yesterday that call for increased use of the
euro in Asian-European trade was ``helpful'' and ``makes sense,'' though
ultimately currency decisions would be made by central banks.
The relative importance of the euro ``is just a matter of course if one
looks at the economic importance of those who are united in the euro
system,'' Schroeder said.
The task force also called for the creation of an ASEM bond fund based
on a basket currency incorporating the yen, the euro, and the U.S.
dollar.
``The idea is to try to promote the euro first, and any Asian
currencies,'' said Alain Cany, chief executive officer at HSBC Holdings
Plc's Vietnam business in Ho Chi Minh City. There's a need ``to balance
the currencies for trade and for capital markets and try to diminish the
influence of the dollarization of the Asian economies,'' he said.
``It makes sense to have a choice, maybe between Euro, yen and
dollars,'' said Cany, who took part in an Asian-Europe Business Forum
held in conjunction with the ASEM.
To contact the reporter on this story:
Jason Folkmanis in Hanoi folkmanis@bloomberg.net
To contact the editor responsible for this story:
Sue Hill in Hong Kong folkmanis@bloomberg.net
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