France Says Surging Euro 'Too High'

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The French government sounded the alarm on Wednesday about the surging value of the euro, vowing to raise the issue with euro zone and G20 partners as concerns about currency wars flare.

The euro has risen to a 14-month high against the dollar and hit its highest level in 33 months against the yen, making euro zone exports dearer on international markets.

"The euro is too high compared with what the European economy deserves," Industry Minister Arnaud Montebourg told reporters.

"We are paying close attention to this question, which will be debated in the Eurogroup (of euro zone finance ministers) and which the president, prime minister and French government are following closely," he added.

The United States and Japan are pumping vast amounts of liquidity into their economies to revive growth, which has had the knock-on effect of weakening their currencie sagainst the euro.

Th eBank of Japan announced last week, in its most determined effort yet to end years of economic stagnation and deflation, that it would buy unlimited amounts of assets in 2014 and double its inflation target to 2 percent.

Officials from the Group of 20 economic powers say that although top economic policymakers are likely to discuss how Japan's new monetary stance is weakening the yen when they meet next month, they will stop short of calling it a competitive devaluation.

Brazil has long warned that the liquidity being pumped into developed economies is fueling "currency wars", but the remarks from Montebourg and other French officials suggest similar concerns are taking hold in Paris.

A senior finance ministry official said that while a strong euro was a sign of growing confidence in the euro zone, it was also a disadvantage for exports resulting directly from other countries' monetary policies.

"It's up to international institutions, starting with the Eurogroup and the G20 to set a course towards fair exchange rates. That's the battle we are going to fight," the official added.

Previous French governments have been vocal over concerns about the euro's strength, which has at times been a source of friction with Germany.

Economists say that France suffers more than Germany when the euro rises because its exports are more price-sensitive than German exports, which include more higher value-added products.

A Deutsche Bank study found that the French economy begins to take a knock when the euro's rise above 1.22-1.24 dollars while for Germany the pain threshold is not reached until the euro gets to an exchange rate in a range of 1.54-1.94 dollars.