WRITTEN QUESTION E-0220/04 by Mario Borghezio (NI) to the Commission. Threats to Po Valley producers as a result of the euro's excessive rise against the dollar.
Date: 2004-01-30
Institutions: European Parliament, Provisional data
Subjects: economic consequence, euro, exchange rate, export (EU), international competition, small and medium-sized enterprises

C 84 E/552

Official Journal of the European Union

EN

3.4.2004

(2004/C 84 E/0629)

WRITTEN QUESTION E-0220/04

by Mario Borghezio (NI) to the Commission

(30 January 2004)

Subject: Threats to Po Valley producers as a result of the euro’s excessive rise against the dollar

The European Trade Commissioner, Pascal Lamy, recently expressed concern at the strength of the euro
exchange rate against the dollar, saying that this could harm Europe’s competitiveness, yet at the same
time the spokesman for the Commissioner for economic and monetary affairs, Gerassimos Thomas,
confirmed the Commission’s determination to pursue a strong euro.

Statements by ECB President Jean-Claude Trichet that the strengthening of the single currency is having a
negative impact on exports seem to confirm Mr Lamy’s concern, but he goes on to say that exports are
holding up despite the strong euro.

What measures does the Commission intend to take to allay the fears expressed, in particular by small
businesses in the Po Valley, that any further strengthening of the European currency could cause losses of
around two billion euros to producers in the north-east of the Po Valley within a few months?

Answer given by Mr Solbes Mira on behalf of the Commission

(5 March 2004)

The euro has undergone an appreciation of around 25 per cent against the dollar since the start of 2003.
However, what matters for competitiveness is the real effective exchange rate. The real effective exchange
rate is based on the evolution of the euro against a basket of currencies, weighted according to their
importance in the external trade of the euro area. It also takes into account differences in inflation rates.
The euro-area real effective exchange rate has only appreciated by around 8 % since January 2003 (when
deflated by nominal unit labour costs) and by 3 % since 1999.

While a strengthening euro does have a negative impact on the competitiveness of euro-area exports, this
effect has been offset by a rebound in the growth of world trade, as economic activity in the major regions
of the global economy continues to strengthen. Furthermore, a stronger euro helps to support higher
domestic demand in the euro area.

The Commission believes that a stable exchange rate is in Europe’s interest.
developments in foreign exchange markets over the coming months.

It will closely monitor

Concerning small businesses (up to 50 employees)
in the Po Valley, one of the major objectives of
Structural Funds actions in Italy is to promote an increase in the competitiveness of firms, notably by
in order to strengthen their export-capacity: Small and
promoting product and process innovation,
medium-sized enterprises (SMEs) also benefit from the leverage effect of venture capital and guarantee
instruments managed by the European Investment Fund.

(2004/C 84 E/0630)

WRITTEN QUESTION P-0222/04

by María Ayuso González (PPE-DE) to the Commission

(26 January 2004)

Subject: Cotton

France has recently presented a ‘European Cotton Initiative’ in support of Africa’s cotton-based economies,
advocating the reform of the Community cotton industry subsidy arrangement, so as to reduce the
allegedly market-distorting subsidies granted by the EU.